Ryanair aims to raise €400 million via a share placing as it seeks to capitalise on post Covid-19 growth opportunities.
Certain directors and members of the senior management team plan to participate, including group chief executive Michael O’Leary, who is expected to subscribe broadly pro rata to his current shareholding, the no-frills airline said.
While the pandemic has created the “most challenging period” in the carrier’s 35-year history, it expects the situation to “create opportunities for Ryanair to grow its network, and expand its fleet, to take advantage of lower airport and aircraft cost opportunities that are likely to arise”.
The airline added: “One of the strengths of Ryanair’s business model during the Covid-19 crisis has been the group’s unit cost advantage over other EU airlines.
“Ryanair has spent a number of months right sizing the cost base to help enable the group’s airlines to further lower costs and pass these lower costs on to customers in the form of lower fares.
“As we look beyond the next year, we expect that there will be significant growth opportunities for Ryanair’s low-cost model as competitors shrink, fail or are acquired by government bailed out carriers.
“Post Covid-19 growth opportunities include gaining market share from peers retrenching, further European airline failures and competitive unit cost advantage over other carriers.
“The placing will provide Ryanair with greater financial flexibility to capture these opportunities.”
The Irish group described its balance sheet as “one of the strongest in the industry” with more than €3.9 billion in cash at June 30, with 333 Boeing 737s worth €7 billion.
“Since mid-March, the group has moved quickly and smartly to preserve cash, cut costs, cancel share buybacks and defer all non-essential capex, ensuring continued balance sheet strength which gives the group what it believes to be a significant competitive advantage,” Ryanair added.
“The net proceeds from the placing are intended to further enhance Ryanair’s liquidity position and underpin its BBB investment grade rating potentially leading to finance cost savings.
“Subject to market conditions, the group expects to access the bond markets in due course and the enhanced liquidity as a result of the placing will likely optimise that issuance.”