Rolls-Royce rescue plan flies as shareholders back £2b rights issue

[LONDON] Shareholders in Britain's Rolls-Royce approved the aero-engine maker's £2 billion (S$3.54 billion) rights issue on Tuesday, injecting cash into the battered business to shore up its finances after the pandemic stopped planes flying.

The approval of the capital raise boosts the group's total liquidity by £5 billion by unlocking extra debt options for Rolls, including £2 billion from a bond issue and an extra £1 billion from a two-year loan.

"The single resolution is passed overwhelmingly," chairman Ian Davis told an online meeting.

Investors are backing CEO Warren East's plan to help the company ride out Covid-19 by cutting 9,000 jobs and closing factories to adjust to a lower demand from airline customers that fly with Rolls engines on Boeing 787s and Airbus 350s.

REUTERS

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL