Cometh the hour

1 October 2020 By Ed Cropley Follow @edwardcropley

Boris Johnson’s government is backstopping the struggling jet-engine maker with nearly 1 bln pounds in loan guarantees. Yet the support hinges on shareholders coughing up double that. It’s a reasonable way to prop up a vital British business while minimising taxpayers’ exposure.

This content is for Subscribers only

Context News

Rolls-Royce said on Oct. 1 it planned to raise up to 5 billion pounds ($6.5 billion) in equity, debt and new credit guarantees to see it through the coronavirus crisis.

The UK aeroengineer said it planned a 2 billion pound rights issue and the sale of 1 billion pounds in multi-currency bonds.

Rolls also said it had agreed commitments to a new two-year loan facility worth 1 billion pounds and had secured “support in principle” from the UK government for an extension of its 80% guarantee for another 1 billion pounds of debt.

Rolls shares dropped 7% to a 16-year low of 120 pence by 0715 GMT on Oct. 1.

Email a friend

Please complete the form below.

Required fields *