Rolls-Royce, the British jet engine manufacturer, has announced its intention to raise approximately £2.5 billion in an attempt to strengthen its balance sheet as the continued effects of the COVID-19 pandemic affect demand both for jet engines and ancillary services.
One of the options being considered by the company is a rights issue, though debt and equity issuances are also being considered. According to the Financial Times newspaper, Rolls-Royce is in discussion with several sovereign wealth funds, including that of Singapore’s GIC, in a bid to raise funds. In a statement the company said that: “We continue to review all funding options to enhance balance sheet resilience and strength,” while adding that the first weeks in October are planned for the launch of the campaign.
In an earlier attempt to mitigate the lack of demand for its products and services, Rolls-Royce laid off 9,000 staff back in May, while it announced its intention to sell off assets, including ITP Aero, it’s Spanish operation. Having burned through £3.0 billion in the first half of 2020, Rolls Royce expects to burn through an additional £1.0 billion in the second half of the year. (£1.00 = US$1.29 at time of publication.)
