Skip to content
Search

Latest Stories

Rolls-Royce expects 'sufficient headroom' with its £5b fund raising plan

BRITISH engine maker Rolls-Royce on Thursday (1) said it will raise £5 billion ($6.5 billion), including £2 billion from shareholders as the coronavirus pandemic has hit its cashflow.

The market value of the firm reduced to just £2.5 billion this year.


Airlines pay Rolls based on how many hours its engines fly in their larger jets and worries over a long-haul travel slump have knocked more than 80 per cent off its shares in 2020.

Rolls, whose engines power the Boeing 787 and Airbus 350, said in May it would cut 9,000 jobs.

"This is a comprehensive package which will take any liquidity questions off the table through this crisis," said CEO Warren East.

"We wanted this package to provide sufficient headroom even through our worst case scenario," East said.

A rights issue has been mooted as an option since July, but East said Rolls had to first demonstrate its restructuring plan was working before it could tap shareholders.

Rolls faces what East called a "pinch point" towards the end of 2021 when £3.2 billion of debt needs to be repaid. To pay for the crisis, Rolls's debt will jump to over £3.5 billion this year from £993 million in 2019.

Worries about its finances have prompted speculation of a government bailout of Rolls, which was nationalised in 1971 and later privatised.

But Chief Financial Officer Stephen Daintith dismissed this, saying: "That's not part of any of our plans".

Britain's best known engineering firm is a key supplier to the country's military programmes, invests heavily in research and development and helps sustain smaller suppliers.

Rolls shares were down 11 per cent to 116 pence at 1118 GMT, their lowest level since 2004, after it said that it would raise about £2 billion pounds through a 10 for 3 discounted rights issue.

Shareholders will vote to approve the rights issue at a general meeting expected to be held on Oct. 27 and conditional upon its completion, additional debt options will open up.

According to the chief executive Rolls was now able to withstand a downturn which would involve 2021 flying levels at less than half last year's levels.

Rolls said if long-haul travel did recover, then despite a cash outflow of £4 billion this year it expected to return to positive cashflow during the second half of next year and was targeting £750 million of free cashflow in 2022.

The company said it intended to begin a bond offering to raise at least £1 billion, while UK Export Finance has indicated it was ready to support an extension of its 80 per cent guarantee of Rolls' existing £2 billion five-year term loan and would support a loan amount increase of up to £1 billion.

More For You

ve-day-getty

VE Day 80 street parties, picnics and community get togethers are being encouraged to take place across the country as part of the Great British Food Festival. (Photo: Getty Images)

Public invited to attend VE Day 80 procession and flypast

THE 80th anniversary of Victory in Europe (VE) Day will be marked with a military procession in London on May 5.

The event will include over 1,300 members of the Armed Forces, youth groups, and uniformed services marching from Parliament Square to Buckingham Palace.

Keep ReadingShow less
Knife crimes

Knife-enabled crimes include cases where a blade or sharp instrument was used to injure or threaten, including where the weapon was not actually seen.

Getty Images/iStockphoto

Knife crime in London accounts for a third of national total: ONS

KNIFE-RELATED crime in London made up almost a third of all such offences recorded in England and Wales in 2024, with the Metropolitan Police logging 16,789 incidents, according to figures released by the Office for National Statistics (ONS) on Thursday.

This amounts to one offence every 30 minutes in the capital and represents 31 per cent of the 54,587 knife-enabled crimes reported across England and Wales last year. The total number marks a two per cent rise from 53,413 offences in 2023.

Keep ReadingShow less
Starmer and Modi

Starmer and Modi shake hands during a bilateral meeting in the sidelines of the G20 summit at the Museum of Modern Art in Rio de Janeiro, Brazil Brazil, on November 18, 2024.

Getty Images

Starmer calls Modi over Kashmir attack; expresses condolences

PRIME MINISER Keir Starmer spoke to Indian prime minister Narendra Modi on Friday morning following the deadly attack in Kashmir’s Pahalgam region that killed 26 people on Tuesday.

According to a readout from 10 Downing Street, Starmer said he was horrified by the devastating terrorist attack and expressed deep condolences on behalf of the British people to those affected, their loved ones, and the people of India. The two leaders agreed to stay in touch.

Keep ReadingShow less
 Post Office Horizon

A Post Office van parked outside the venue for the Post Office Horizon IT inquiry at Aldwych House on January 11, 2024 in London, England. (Photo: Getty Images)

Getty Images

Post Office spent £600m to keep Horizon despite plans to replace it: Report

THE POST OFFICE has spent more than £600 million of public funds to continue using the Horizon IT system, according to a news report.

Despite deciding over a decade ago to move away from the software, the original 1999 contract with Fujitsu prevented the Post Office from doing so, as it did not own the core software code, a BBC investigation shows.

Keep ReadingShow less
Pahalgam attack: Prayer meet held at Indian mission in London

The prayer meet was led by Indian High Commissioner to the UK Vikram Doraiswami

Pahalgam attack: Prayer meet held at Indian mission in London

Mahesh Liloriya

A PRAYER meet was held at the Gandhi Hall in the High Commission of India in London on Thursday (24) to pay respects to the victims of the Pahalgam terrorist attack.

Chants of ‘Bharat Mata Ki Jai’ rang out at the event which was led by Indian High Commissioner to the UK Vikram Doraiswami.

Keep ReadingShow less