The Brisbane company made the announcement after its shares jumped in response to the announcement from Pfizer that it had developed an effective vaccine for COVID-19.
Flight Centre will also enter into a $350 million, three-year syndicated debt facility and its banks will waive some compliance covenants. However, it will have to maintain a cash-to-total borrowings ratio of greater than or equal to 1:1.
The capital raising will be done through $400 million convertible note issue due in 2027 when they will convert to ordinary shares priced at $20.04. The notes will have a yield of 2.25 to 3 per cent.
Net proceeds will be $392 million after commissions and fees.
A placement of 5 million ordinary shares was also done to facilitate hedging.
Managing director Graham “Skroo” Turner said the capital management initiatives would enhance the company’s funding position with longer-term, extended covenant relief and greater liquidity.
“While trading conditions continue to improve we continue to reduce our cost base and we remain prepared for all scenarios, including a prolonged downturn,” Turner said.
“We are seeing a gradual improvement in revenue trends albeit from a modest level and importantly, we continue to win key customers in our corporate business notwithstanding the difficult conditions.
“The recent easing of lockdown restrictions in Australia, our largest market, gives us confidence of further improvement in the near term.”Jump to next article