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Rolls-Royce plans to ask investors for 2. 5 billion pounds to bolster their finances as the coronavirus continues to wreak havoc around the world.
The firm, which manufactures aircraft engines, said it “assesses” the accumulation in the quantity and contemplates a number of options, adding a issuance of rights.
Rolls-Royce has stated in the past that it does not expect it to return to prepandemic grades for five years.
It has already announced 9,000 task cuts from a primary restructuring.
The Financial Times has announced for the first time that Rolls-Royce is raising 2. 5 billion pounds and is in talks with several sovereign funds, adding Singapore’s ICG.
The corporate said: “We continue to explore all the financing features for the resilience and strength of the balance sheet.
“Among other options, we assess the merits of increasing equity to 2. 5 billion pounds, through a number of structures, adding a rights factor and potentially another equity issuance bureaucracy. Our review also includes new debt factors.
He added that no final resolution had been made “on whether to continue with any of these characteristics or when or on the exact amount that could be raised. “
The government has a “gold action” in Rolls-Royce that prevents the company, which will be of strategic interest to the UK, from going under foreign control.
In August, Rolls-Royce reported a record loss of 5. 4 billion pounds during the first part of its fiscal year.
The global industry is virtually paralyzed by the pandemic. Hopes for a resumption of activity have faded through adjustments in countries on a quarantine list that are forcing visitors to the UK to isolate themselves.
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Under an “hourly ignition” model, Rolls-Royce earns cash every time an aircraft flies one of its engines. It generates about four billion pounds a year thanks to this model.
However, it expects flight hours to be halved for this exercise.
Some 3,000 jobs are being cut in the UK and the number of its international sites is falling from 11 to 6 plant closures in Nottinghamshire and Lancashire.
It expects a restructuring of its civilian aerospace department to result in savings of more than 1. 3 billion pounds by the end of 2022.
Rolls-Royce also aims to raise more than 2 billion pounds by disinteping parts of the group, adding its ITP Aero turbine production business in Spain.
Last month, the company completed a loan of 2 billion pounds, partly subsidized through UK Export Finance, a government agency.
While Rolls-Royce’s civilian aerospace business was affected by the pandemic, the company said its defense department remained resilient and, in its recent peaks, had announced a 2% increase in revenue.