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

Police Recover £1M Stolen Jewellery in Hounslow, Owners Sought

The jewellery was largely taken from London’s South Asian community in Hounslow between 2023 and 2024. (Photo: Met Police)

Stolen jewellery worth £1m recovered in Hounslow, police seek owners

POLICE are seeking to reunite stolen jewellery worth over £1 million with its rightful owners after recovering the items during a proactive operation across London and the home counties.

The recovered collection includes identifiable pieces such as a World War One officer’s Rolex watch, a gold locket containing old pictures, an engraved gold ring, and an engraved gold pocket watch from Harlow Bros Ltd.

Keep ReadingShow less
british-muslims

The initiative aims to track incidents, raise awareness of hate crime, and provide better victim support.

iStock)

Government announces fund to combat anti-Muslim hate

THE UK government has announced a new fund to monitor anti-Muslim hate and support victims, with applications opening on 7 April.

The initiative aims to track incidents, raise awareness of hate crime, and provide better victim support.

Keep ReadingShow less
Probe launched over racist broadcast at Kent asylum centre

FILE PHOTO: Entrance of Manston short-term holding centre for migrants, near Ramsgate in southeast England. (Photo by BEN STANSALL/AFP via Getty Images)

Probe launched over racist broadcast at Kent asylum centre

AUTHORITIES have launched an investigation following reports that a racist message was broadcast over portable radios at an asylum processing centre in Kent.

The incident occurred at the Manston site, where small boat arrivals are processed by the Home Office and its contractor, Mitie, reported The Guardian.

Keep ReadingShow less
Protest against dog crackdown ahead of Modi's Sri Lanka visit

Sri Lankan animal rights activists take part in a demonstration in Colombo on April 3, 2025, to protest the round-up of stray dogs a day ahead of a visit by Narendra Modi. (Photo by ISHARA S. KODIKARA/AFP via Getty Images)

Protest against dog crackdown ahead of Modi's Sri Lanka visit

SRI LANKAN animal rights activists marched on Thursday (3) to protest the round-up of stray dogs a day ahead of a visit by Indian prime minister Narendra Modi.

Authorities in Colombo and the Buddhist pilgrim city of Anuradhapura have reportedly deployed dog catchers to impound hounds ahead of Modi's visit, which begins on Friday (4).

Keep ReadingShow less
modi-trump-getty

Donald Trump and Narendra Modi hold a joint press conference in the East Room at the White House on February 13, 2025 in Washington, DC. (Photo: Getty Images)

Getty Images

Explained: Impact of US tariffs on Indian exports

The United States has announced a 27 per cent reciprocal tariff on Indian goods entering the American market.

Industry experts have said these duties will pose challenges for Indian exports, though India's position remains more favourable than some of its competitors.

Keep ReadingShow less