EasyJet boosts cash reserves to £2.3bn

EasyJet has secured £600 million in credit through the government’s Covid Corporate Financing Facility (CCFF) as it looks to maximise liquidity.

Announcing the new facility, easyJet also confirmed it has requested to fully draw down on a $500 million revolving credit facility, secured against its aircraft assets.

Together, the additional funds would give the carrier access to cash reserves of £2.3 billion by April 9.

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The CCFF is a joint-lending facility for large businesses made available by the Treasury and the Bank of England.

The £600 million was raised through issuing “commercial paper” or short-term promissory notes (loans) designed to bridge cash flow.

EasyJet announced it has agreed furlough arrangements with its pilots, following the announcement of similar agreements with cabin crew and training instructors.

Johan Lundgren, chief executive, said: “We remain absolutely focused on ensuring the long-term future of the airline, reducing our costs and preserving jobs, to make sure easyJet is in the best position to resume flying once the pandemic is over.

“We are pleased we have now reached agreement with both Unite and Balpa regarding furlough arrangements for UK-based easyJet pilots and crew.”

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He added: “Our current priority is to safeguard short-term liquidity, so we have borrowed from the CCFF and drawn down on our Revolving Credit Facility in order to increase our liquidity in the event of a prolonged grounding of the fleet.

“The CCFF provides businesses with access to funds at the commercial rates which were available before the coronavirus crisis and any UK company that had an investment grade rating before the crisis can apply for this funding.”

Following temporary changes to financial reporting guidelines, easyJet will release a trading update in the second half of April and half-year results on June 30.

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