By Edward Thicknesse, cityam.com
Package holiday firm Jet2 has today taken steps to shore up its finances to the tune of more than £500m as the wait for a full-scale return to travel goes on.
The firm, which has cancelled all of its holidays until 24 June due to the ongoing travel “uncertainty”, said it had signed a new £150m loan agreement.
And it also said it was launching a bond offering of guaranteed senior unsecured unrated convertible bonds worth £387.4m.
The new funding comes on top of £1bn that the Leeds-based company has already raised in the past year to offset the damage done by the pandemic.
In a statement, Jet2 said that it was still “encouraged” by the volume of customer bookings to date for both winter 2021-22 and for summer 2022.
That is despite concerns that the government is unlikely to add many more countries to the UK’s quarantine-free travel “green list” when it updates it today.
Airlines and travel firms have been beseeching ministers to add popular locations like the Balearic and Canary Islands to the small group of countries to which people can currently travel without isolating on return.
But overnight there were reports that Portugal could be taken off the “green list” in today’s update after a growing number of cases.
Last week Jet2 boss Stephen Heady said that the UK’s hesitance to open up travel risked the country being left behind by the rest of Europe.
“Travel has been made safe and the UK Government isn’t taking any recognition of the fact that 60 per cent of the population have had one vaccine, 25 per cent of the population have had two vaccines, hundreds of thousands have had the virus and built up antibodies. There has been no recognition of that at all.
“Either the vaccine works or it doesn’t.
“The Government’s approach is ultra-cautious, which in a continent that is walking out of the crisis we’ve been in, we’re being left behind”.
Commenting on today’s announcement, Jet2 said: “The proceeds of the issuance of the convertible bonds will be used to strengthen Jet2’s balance sheet further and position the company for a strong recovery as lockdown restrictions are lifted, through fleet growth and fleet renewal opportunities.
“In addition to the convertible bonds and the company’s existing revolving credit facility, Jet2 has also signed a new unsecured £150 million term loan maturing in September 2023 as further liquidity to enhance balance sheet capability and flexibility.
“These transactions together, further improve the ability for Jet2.com and Jet2holidays to capitalise on any upturn opportunities, benefiting all stakeholders, including shareholders.”