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| Version 2 | Version 3 |
|---|---|
| BA announces plan to raise £600m | BA announces plan to raise £600m |
| (30 minutes later) | |
| British Airways plans to raise £600m to help it get through difficult trading conditions, the airline has said. | British Airways plans to raise £600m to help it get through difficult trading conditions, the airline has said. |
| It will issue £300m in convertible bonds to existing shareholders and release bank guarantees from its UK defined benefit pension schemes. | It will issue £300m in convertible bonds to existing shareholders and release bank guarantees from its UK defined benefit pension schemes. |
| Observers say the carrier wants a safety net in case it faces industrial action from cabin crew over pay, as well as tough summer trading. | |
| BA predicts it lost about £100m in the three months to the end of June. | BA predicts it lost about £100m in the three months to the end of June. |
| "Following discussions with institutional investors, we're taking action to improve our liquidity and strengthen our position within the industry," BA chief executive Willie Walsh said. | "Following discussions with institutional investors, we're taking action to improve our liquidity and strengthen our position within the industry," BA chief executive Willie Walsh said. |
| "This goes hand-in-hand with our cost reduction and efficiency initiatives which are designed to create the right conditions for our sustainable, long term profitability." | "This goes hand-in-hand with our cost reduction and efficiency initiatives which are designed to create the right conditions for our sustainable, long term profitability." |
| Shares rise | |
| BA said the new funding would increase liquidity at the airline from £1.25bn to about £2bn. | |
| If shareholders back the fundraising plan, the airline would have to pay interest on the convertible bonds. Shareholders would be able to convert the bond into BA shares, once shares met a set price - expected to be confirmed later. | |
| The bonds can be converted up until 2014. | |
| Once converted, BA said the number of shares in the airline would increase between 15% and 20%. | |
| Shares in BA rose 2% to 134.9 pence when trading began in London. | |
| Union talks | Union talks |
| BA has been struggling as demand for air travel has fallen during the global economic downturn, with particular decline in business class and first class travel. | BA has been struggling as demand for air travel has fallen during the global economic downturn, with particular decline in business class and first class travel. |
| In May, it reported a record annual loss of £401m. | In May, it reported a record annual loss of £401m. |
| The airline has been in negotiations for several weeks with unions over plans to cut costs and has asked thousands of employees to take pay cuts or work for nothing. | The airline has been in negotiations for several weeks with unions over plans to cut costs and has asked thousands of employees to take pay cuts or work for nothing. |
| Earlier this week, BA pilots voted overwhelmingly to accept a 2.6% pay cut. Talks with unions representing cabin crew and ground staff are ongoing, but if no resolution is reached, the firm could face a summer of strikes by its 14,000 cabin crew. | Earlier this week, BA pilots voted overwhelmingly to accept a 2.6% pay cut. Talks with unions representing cabin crew and ground staff are ongoing, but if no resolution is reached, the firm could face a summer of strikes by its 14,000 cabin crew. |