Tuesday, April 16News That Matters

Flight Centre starts pitch for $500m rescue

Flight Centre Travel Group is attempting to secure support for a $500 million equity raising, which would likely take place at a huge discount to its last traded price.

The Australian Financial Review claims the business is now in front of a small group of fund managers working to secure a deal, priced at just $7.20 per share.

The sources claim Macquarie Capital and UBS started crossing funds, including existing institutional shareholders, on Friday, with the two banks expected to underwrite the offer.

Shares in the company last traded at $9.91, down from a 52-week high of $49.14, before a suspension.

Last week, Flight Centre Travel Group announced that 3,800 sales and support employees would be either stood down or made redundant in Australia.

The business also said it would shut 30 per cent of its leisure outlet shops across multiple brands at home, and 35 per cent worldwide.

Globally, the cuts affected 6,000 of its 20,000 staff, allowing the group to “initially” retain 70 per cent of its workforce.

Tigerair Australia Airbus A320 VH-VNR operates the inaugural Melbourne-Canberra service. (Paul Sadler)

A Tigerair Australia Airbus A320 landing in Canberra. (Paul Sadler)

In a statement released to the ASX, the business maintained it intends to return stood-down staff to the workforce when the restrictions are lifted.

Managing director Graham Turner said, “We are dealing with unprecedented restrictions and extraordinary circumstance that are having a significant impact on our customers, people, suppliers and all other stakeholders.

“People are effectively unable to travel in the near term, either domestically or internationally, and some are actually unable to be repatriated to their home countries, which is affecting thousands of people and is a problem that we’re working to help solve.”

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