25th Sep 2020 17:24
(Alliance News) - Rolls-Royce Holdings PLC late on Friday said it noted continued media speculation regarding the possibility of undertaking a fundraising, but the jet engine maker said that no final decision had been taken.
Sky News reported on Friday afternoon that the Kuwait Investment Office was in talks with the Trent 1000 engine maker about its potential GBP2.5 billion fundraising. In addition, the Financial Times, citing three people with direct knowledge of the matter, had reported on Sunday that Rolls-Royce was in talks with sovereign wealth funds, including Singapore's GIC, to raise GBP2.5 billion in October.
Rolls-Royce on Monday said it was evaluating the "merits" of raising GBP2.5 billion via a share issue to "enhance balance sheet resilience and strength".
Rolls-Royce has been battered by the coronavirus pandemic as the grounding of passenger jets has meant significantly lower flying hours. This has hurt the company's revenue as airlines pay based on how much they use the engines, the trademark Rolls-Royce "power-by-the-hour" scheme.
In a bid to stay afloat following the collapse in global aircraft demand, Rolls-Royce has undertaken an aggressive restructuring that involves axing 9,000 jobs. In August, the company confirmed plans to shut its aerospace factory in Nottinghamshire and potentially to combine sites in Lancashire.
The company reiterated its stance on Friday saying it continues to review all funding options to "enhance balance sheet resilience and strength".
"No final decisions have been taken as to whether or when to proceed with any such options, the precise amount that may be raised, or any allotment of shares to any investor including any sovereign wealth fund," the London-headquartered firm said.
Rolls-Royce shares closed up 3.1% at 154.75 pence on Friday but are down 77% so far in 2020.
By Arvind Bhunjun; [email protected]
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