World News – GB – Rolls-Royce shares hit 17-year low after revealing £ 2bn cash call


Rolls-Royce shares fell to their lowest level in 17 years as the aircraft engine maker announced a £ 5bn contingency plan to shore up a ravaged balance sheet by the coronavirus pandemic

The dramatic decline in global air travel during the pandemic has hit Rolls-Royce’s revenue from servicing its jet engines and selling new ones

The engineering group has said it will mobilize shareholders in a £ 2bn rights issue and increase debt with a £ 1bn bond offering He also announced a new two-year loan of £ 1bn and a potential £ 1bn extension of a loan that would be 80% backed by the UK government’s Export Finance Agency (UKEF)

The £ 2bn rights issue was the biggest fundraiser by a non-financial public company in the UK since 2010, according to Greenhill, one of the investment banks advising Rolls-Royce Eleven investment banks were among the beneficiaries of £ 80million in fundraising fees

It follows days of speculation and the stock price is falling at the manufacturer, which has lost 80% of its value since January and has a market cap of less than £ 25 billion At one point on Thursday its shares were trading at 11255p, the lowest since 2003 They ended the day down 102%, at 117p

Rolls-Royce said its rights issue was fully subscribed and offered a 41% reduction, with the company planning to issue 10 new shares for three existing shares.In addition, the group entered into a new loan facility of two years worth £ 1 billion, conditional on completion of the fundraising

The coronavirus lockdown has prompted some of the UK’s biggest companies to announce large-scale job losses The aviation, automotive and retail sectors have been among the most affected, companies adapting to dramatically reduced revenue projections

While the government’s job retention program has so far protected millions of jobs, fears are growing that unemployment will rise as the program begins to be phased out from August

Since the lockdown began on March 23, some of Britain’s biggest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK

M&Co a ???? 400 jobs August 5: M&Co, the Renfrewshire-based clothing retailer formerly known as Mackays, will close 47 of 215 stores

WH Smith – 1,500 jobs August 5: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly at UK train stations and airports

Pizza Express – 1,100 jobs Aug 4: Restaurant chain plans to close 70 restaurants in bailout restructuring deal

Dixons Carphone – 800 jobs August 4: Electronics retailer Dixons Carphone cuts 800 executives from its stores as it continues to cut costs

DW Sports – 1,700 jobs at risk August 3: DW Sports fell into administration, immediately shutting down its merchant site and risking the closure of its 150 gyms and stores

Brand & Spencer â ???? 950 jobsJuly 20: Main Street Pillar cuts managerial positions in stores as well as head office positions related to store ownership and operation

Ted Baker – 500 jobs July 19: Around 200 positions to be filled at the fashion retailer’s London headquarters, at the Ugly Brown Building, and the rest in stores

Azzurri â ???? 1,200 jobs July 17: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes his Pod lunch commercial delivery only

Burberry – 500 jobs worldwide July 15: Total includes 150 UK head office jobs as luxury brand tries to cut costs by £ 55million after sales plummet during pandemic

G4S – 1,150 jobs July 13: Security firm G4S plans to lay off 1,150 workers as it cuts down on troubled cash handling business and faces use of cash in pandemic

Boots – 4,000 jobs July 9: Boots cuts 4,000 jobs or 7% of its workforce â ???? closing 48 opticians’ outlets and reducing staff at its Nottingham head office as well as some management and customer service roles in stores

John Lewis – 1,300 jobs July 9: John Lewis announced plans to permanently shut down eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs

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Celtic Mansion – 450 jobs July 9: Patrons of the Celtic Collection in Newport, which hosted the 2010 Ryder Cup of Golf and the 2014 NATO Conference, say 450 of its 995 workers will lose their jobs

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DHL – 2,200 jobs July 7: Some 2,200 UK logistics workers involved in manufacturing Jaguar Land Rover vehicles to lose their jobs Around 40% of DHL staff employed on carmaker contract

Reach â ???? 550 jobs July 7: The owner of the Daily Mirror, Daily Express and Daily Star newspapers will cut 550 jobs, or 12% of its workforce, amid falling demand for advertising in its titles

Pret a Manger – ???? 1,000 jobs July 6: Pret a Manger will permanently close 30 branches and could cut at least 1,000 jobs after suffering « significant operating losses » in the wake of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs July 2: Owner of restaurant chains Bella Italia, Café Rouge and Las Iguanas collapsed in administration, with the immediate loss of 1,900 jobs The company said several offers were on the table for parts of the business but buyers did not want to acquire all existing sites and 91 of its 250 outlets would remain permanently closed

Arcadia – 500 jobs July 1: Arcadia, Sir Philip Green’s struggling fashion group who owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis â ???? said in July that 500 out of 2,500 headquarters jobs would be cut in the coming weeks

SSP Group – 5,000 jobs July 1: Owner of Upper Crust and Caffè Ritazza to cut 5,000 jobs, roughly half of its workforce, with cuts to its head office and UK operations after the pandemic blocked national and international travel

Accenture – 900 jobs July 1: New York-listed consulting firm cuts 900 jobs at all levels for 11,000 UK employees amid declining demand for services

Harrods – 700 jobsJuly 1: The department store group cuts one in seven of its 4,800 employees because of the « permanent impacts » of the pandemic

Airbus – 1,700 jobs June 30: The European manufacturer announced its intention to cut 15,000 jobs, including 1,700 in the UK, as it warned that the coronavirus pandemic had triggered the ‘most serious crisis’ in its history

Harveys – 240 jobs June 30: Administrators made 240 layoffs at the Harveys furniture chain with more than 1,300 jobs at risk if a buyer cannot be found

TM Lewin â ???? 600 jobs June 30: Shirtmaker TM Lewin permanently closed its 66 outlets with the loss of around 600 jobs

Royal Mail – 2,000 jobs June 25: Royal Mail has announced a cost-cutting plan that will involve cutting around 2,000 jobs, or one in five of its nearly 10,000 managerial positions

Swissport â ???? 4,500 jobs June 24: Swissport, which handles baggage and passenger freight for airlines, has started a consultation process to lay off 4,556 workers, more than half of its 8,500 UK employees

Jaguar Land Rover – 1,100 jobs June 15: The UK’s largest car maker cut 1,100 contract workers at factories in Merseyside and West Midlands

Travis Perkins – 2,500 jobsJune 15: The Builders merchant, who is behind DIY retailer Wickes and Toolstation, is cutting 2,500 jobs in the UK, representing nearly a 10th of its 30,000 employees

Centrica â ???? 5,000 jobs June 11: The owner of British Gas announced in June his intention to cut 5,000 jobs – a quarter of his UK workforce – in mostly managerial positions, and cut three levels of management

Johnson Matthey – 2,500 jobs Jun 11: The chemical company, a major supplier of catalytic converters for cars, plans to make 2,500 layoffs globally over the next three years, 17% of its workforce

Bombardier – 600 jobs June 11: Canadian aircraft manufacturer to cut 600 jobs in Northern Ireland, as part of 2,500 layoffs announced in June

Accessorizing the monsoon – 545 jobs June 11: The fashion brands were bought from the administration by their founder, Peter Simon, in June, in a deal that saw 35 stores close permanently and resulted in the loss of 545 jobs

BP â ???? 2,000 jobsJune 8: The oil company in June announced plans to lay off 10,000 people worldwide, including around 2,000 in the UK, mostly in office positions, by the end of the year

Mulberry – June 8: The luxury fashion and accessories brand announced in June that it will cut 25% of its global workforce and has started a consultation with the 470 employees at risk

Bentley – 1,000 jobsJune 5: Crewe-based luxury automaker intends to cut its workforce by 4,200 by nearly a quarter, cutting 1,000 jobs through voluntary layoff plan

Aston Martin Lagonda – 500 jobs June 4: The struggling Warwickshire-based luxury car maker even before the pandemic announced 500 layoffs

Lookers â ???? 1,500 jobs June 4: The car dealership chain announced it plans to cut 1,500 jobs and close 12 dealerships just days after car showrooms were allowed to reopen in England

Rolls-Royce – 9,000 jobsJune 3: The jet engine maker has confirmed that 3,000 job cuts, out of the 9,000 planned worldwide, will be carried out at sites in the UK

The group of restaurants – 3000 Jobs June 3: Restaurant chain owner such as Wagamama and Frankie & Benny’s has closed most of Chiquito’s branches and its 11 Food & Fuel pubs, with 120 more restaurants to close permanently Total job losses could reach 3,000

EasyJet – 4,500 jobsMay 28: The airline announced plans to cut 4,500 employees, or 30% of its workforce, as it braced for a drop in demand

McLaren â ???? 1,200 jobs May 26: McLaren Group, owner of the Formula 1 team and maker of supercars, cuts 1,200 jobs as it struggles to save money

Clarks – 900 jobs May 21: Clarks plans to cut 900 office jobs globally as it grapples with growth in online shoe shopping and the pandemic

Ovo Energy – 2,600 jobs May 19: Britain’s second-largest energy supplier announced in May that it plans to cut 2,600 jobs and close offices after its online customer service lockdown

JCB – 900 jobs May 15: Backhoe maker JCB said in May that up to 950 jobs were at risk after demand for its machines halved due to coronavirus shutdown

Tui â ???? 8,000 jobs May 13: Travel company Tui plans to cut up to 8,000 jobs globally in response to coronavirus chaos ravaging the tourism industry

Virgin Atlantic – 3,000 jobs May 5: Richard Branson’s airline to cut more than 3,000 jobs, over a third of its workforce, and shut down operations at Gatwick

Ryanair – 3,000 jobs1 May: Irish airline intends to cut 3,000 jobs and cut staff pay by up to a fifth

Aer Lingus – 900 jobs May 1: Irish airline, part of the International Airlines Group (IAG), plans to cut 900 jobs

Oasis and warehouse – 1,800 jobs April 30: Fashion brands were bought out of administration by restructuring firm Hilco in April, with all of their stores closed for good and the loss of over 1,800 jobs

April 28: The British airline plans to lay off up to 12,000 of its staff, a reduction of one in four jobs at the airline, which will affect cabin crew, pilots and staff at the ground

April 23: British engineering firm Meggitt plans to cut around 1,800 jobs in manufacturing parts for commercial aviation

April 23: French aircraft seat manufacturer Safran cut 400 jobs in its UK operations, including a factory in Cwmbran

April 21: More than 900 jobs are to be cut with immediate effect at retro retail brand Cath Kidston after the company announces the permanent closure of 60 UK stores

April 9: At least 4,000 jobs will be lost at Debenhams from its head office and closed stores, following its collapse in administration in April, for the second time in a year

Laura Ashley – 2,700 jobs March 17: Laura Ashley collapsed in administration with 2,700 job losses and said rescue talks have been thwarted by the pandemic

The Derby-based company said the measures were designed to improve its liquidity and reduce debt on its balance sheet He added that he did not plan to generate cash again until 2022

Rolls-Royce has been hit hard by the impact of the coronavirus on its civil aviation business, and in August it reported a record £ 54 billion in first half losses The company said it expected to have burned £ 4 billion in cash by the end of 2020

Demand for its engines has plummeted, and the group is in the midst of the biggest restructuring in its history, cutting 9,000 jobs globally and shutting down several production sites It is also looking to sell assets to raise at least £ 2 billion, including Spanish engine maker ITP AeroRolls-Royce Managing Director Warren East said: “We are taking decisive and transformative action to fundamentally restructure our operations, significantly reduce our cost base and improve our financial position The capital increase announced today improves our resilience to navigate the current uncertain operating environmentâ ????

Ahead of Thursday’s announcement, Rolls-Royce had been criticized by some of its shareholders for a perceived delay in announcing the details of its cash call

East said the company wanted to put together an ‘integrated package’, including equity raising, new debt and loans

– It was important that we put other pieces of the package in place before we went into the stock market, â ?? he said â ???? We could stay on the sidelines for another six months, but that would pose serious continuity problems for us. We know the debt and equity markets are open now and we don’t know if they will be…

Rolls-Royce predicted that it would take until 2025 for aircraft engine orders to return to pre-coronavirus levels, and said its path to making money remains dependent on timing and the shape of the economic recovery after the pandemic

The bailout package received a cautious reception from some analysts Credit rating agency Moody’s, which downgraded Rolls-Royce’s rating to junk status in July, said the collection of fund was broadly positive in terms of the outlook for the company’s debt repayment, but highlighted lingering uncertainty for aviation

Rolls-Royce’s proposed debt and finance package will dramatically improve liquidity margin to handle potentially slow and delayed recovery in engine flight hours said Martin Hallmark, senior vice president at Moody’s But downside risks around future cash flows, including realizing cost savings and how the market recovery will evolve, mean the liquidity margin remains uncertainâ ????

Rolls-Royce share price

Global news – UK – Rolls-Royce share hit 17-year low after revealing a cash call from £ 2 billion



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