Published on : Friday, September 4, 2020
On Thursday, Ryanair raised €400 million in a share sale in order to strengthen its balance sheet amid the COVID-19 crisis, and to take advantage of “significant growth opportunities” as rivals run into trouble. The airline said in a statement that 2020 has proven to be the most challenging period in Ryanair’s 35-year history so far and has created an unprecedented difficult environment for the wider European airline sector.
It also mentioned that the group believes that it has responded well to the crises, and that the current environment is likely to result in long-term impacts for the sector. The company expects that the present environment will 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 share placing was managed by stockbroking firm Davy on Thursday evening and now equates to about 3.1% of Ryanair’s €12.7 billion market value as of the close of European trading. The carrier also mentioned that it is pleased by the strong support it has received from new and existing shareholders. Ryanair has also mounted legal challenges to European Commission authorisations of aid packages for carriers including Air France, Lufthansa, and Portugal’s TAP as the industry continues to deal with the crisis.
It shared that as the airline look beyond the next year it expects 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. The airline informed that post COVID-19 growth opportunities include gaining market share from peers retrenching, further European airline failures and competitive unit cost advantage over other carriers.
It mentioned that the placing will provide Ryanair with greater financial flexibility to capture these opportunities. Certain directors and members of the senior management team intend to participate in the placing, including group Chief Executive Michael O’Leary, who intends to subscribe for stock to maintain his current 4% stake.