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| Version 3 | Version 4 |
|---|---|
| BA announces plan to raise £600m | BA announces plan to raise £600m |
| (about 3 hours 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. | 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. |
| But it added that this was "slightly better than market expectation". | |
| This puts to bed the suggestions that British Airways is in any sort of risk in the short term Willie Walsh, BA chief executive | |
| "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 | Shares rise |
| BA said the new funding would increase liquidity at the airline from £1.25bn to about £2bn. | 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. | 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. | 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%. | 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. | Shares in BA rose 2% to 134.9 pence when trading began in London. |
| Mr Walsh said the move "puts to bed the suggestions that British Airways is in any sort of risk in the short term". | |
| "We are clearly in a very strong position, relative to most airlines," he added. | |
| 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. |