Rolls-Royce, in difficulty, launches a recapitalization plan to 5 billion pounds – archyde

The British engine manufacturer Rolls-Royce, in great difficulty because of the crisis in the aviation sector generated by the Covid-19 pandemic, announced on Thursday a recapitalization plan to the tune of 5 billion pounds.

In a statement, he said he had secured a two-year billion pound loan, 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 project to raise two billion pounds by granting preferential subscription rights to its shareholders, and a bond issue "at least a 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 industrial group, among the most important in the United Kingdom, while estimating that its"long-term outlook remains good".

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

He announced in May a major restructuring to adapt to the sharp fall in demand in civil aeronautics, with the objective of saving £ 1.3 billion at least by the end of 2022. This plan included "at least 9,000 job cuts»Out of 52,000 people at the time. Thursday, the group evokes a figure closer to 10,000 departures in its press release: "already 4,800 people had left the company at the end of August and another 5,000 should follow by the end of the year".

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

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