Rolls-Royce: a recapitalization plan to 5 billion pounds – Air-Journal

Rolls Royce to cut 9000 jobs mainly in the civil aviation - Rolls-Royce: a recapitalization plan to 5 billion pounds - Air-Journal


Rolls Royce, supplier of aircraft engines to Airbus and Boeing, announced Thursday a plan to recapitalization to the tune of 5 billion pounds (5.5 billion euros).

In a statement, the British engine manufacturer says it has secured a loan of £ 1 billion over two years, and an extension of an existing loan guarantee of up to £ 1 billion, from the public body UK Export Finance . Added to this is the plan to raise two billion pounds by granting preferential subscription rights to its shareholders, and a bond issue of at least one billion pounds.

"These measures aim to improve the financial resilience of the company and provide it with a more appropriate balance sheet structure to face macroeconomic risks before the return of a capacity to generate significant liquidity expected in 2022", Comments the British industrial group, considering however that its"long-term outlook remains good".

Rolls-Royce expects reduced investments in its civil aviation division because "most of (its) development programs have been completed"And he expects his recent engine models to allow him to generate"significant cash flow (…) over the long term". He finally says to see "good growth opportunities in defense and electrical systems”Notably thanks to the energy transition.

Suppression of 10,000 jobs
Rolls-Royce had announced in May a major restructuring to adapt to the sudden drop in demand in civil aeronautics, with the objective of saving 1.3 billion pounds at least by the end of 2022. This plan included "at least 9,000 job cuts"Out of a workforce of 52,000 people. In its press release, the British group now evokes a figure closer to 10,000 departures: "already 4,800 people had left the company by the end of August and another 5,000 should follow by the end of the year".

At the end of August, Rolls-Royce had published a net loss of 5.4 billion pounds for the first half of 2020, sharply widening its deficits compared to the previous year, when it was already in the red of 909 million pounds due to technical problems on certain engines. The engine manufacturer expects a very slow recovery in its aerospace industry, estimating that engine orders will remain below 2019 levels until 2025.

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