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11 May 2020 | 09:48

EasyJet may need to raise up to ?1bn due to quarantine plans, Citi says

(Sharecast News) - Budget airline easyJet could be forced to raise at least ?700m to ?1bn of capital via an equity issuance as a result of government plans to impose a 14-day quarantine on travellers arriving in the UK from June. "Last night's initiative by the government will have two significant consequences for the UK airline industry: 1. The sizeable monthly cash burn rates will persist through summer. 2. A number of customers and industry bodies will increase the volume on their demands for immediate cash refunds to consumers," Citi said.

The bank said the output from both of these points is that further sizeable capital raises will most likely ensue, with easyJet and British Airways parent IAG being the most likely candidates of the listed names affected.

It said that having not tapped the equity markets early in this crisis, the terms may now not be as favourable for an easyJet equity raising .

"And of course that crucial vote from Sir Stelios towards/against the management & board is looming at the end of the month," Citi added.

At 0940 BST, easyJet shares were down 7.4% at 491.38p and IAG shares were 2.8% lower at 185.05p.
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