Finnair, the Finnish carrier, has announced its intention to raise up to 600 million euros ($633 million) through a rights issue. The primary objective of this fundraising is to enhance the company’s financial stability and reduce financing costs. The funds raised will also support the execution of Finnair’s strategic plans, promoting sustainable and profitable growth while ensuring the capacity for future investments.
By issuing these rights, Finnair aims to achieve its key financial targets by the end of 2025. These targets include a comparable operating profit margin of 6%, maintaining a net debt to comparable earnings before interest, tax, depreciation, and amortization ratio of 1-2 times, and reinstating the company’s ability for shareholder distributions from 2025 onwards.
The net proceeds generated from the rights issue will primarily be used to pay off the outstanding portion of a €400 million capital loan. Additionally, the company has already redeemed a hybrid bond for €200 million on September 1st. These actions will contribute to establishing a sustainable balance sheet and significantly reduce Finnair’s financing costs.
Importantly, the rights issue has received strong support from Finnair’s main shareholders, including the State of Finland. Moreover, the remainder of the offering has been fully underwritten.
Finnair’s decision to pursue this rights issue demonstrates its commitment to securing a solid financial foundation and driving future growth. With these strategic steps in place, Finnair is well-positioned to navigate the evolving aviation landscape and thrive in the years to come.
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