Finnair Successfully Raises €558.2 Million in Oversubscribed Rights Issue

Finnair (AY) has concluded a highly successful rights issue, garnering approximately EUR558.2 million (USD609.5 million) in net proceeds, as per preliminary results released by the airline on November 21, 2023. The oversubscribed offer saw the subscription of 19,038,769,224 new shares, representing approximately 100.14% of the offer shares at a price of EUR0.03 (USD0.033) per share.

Upon board approval, Finnair’s total number of shares will witness a substantial increase from 1,408,726,198 to 20,421,139,267 shares, resulting from the offering. After accounting for net transaction costs, the airline is set to receive net proceeds of about EUR558.2 million, with approximately EUR239.6 million (USD261.6 million) in cash.

Finnair’s CEO, Topi Manner, expressed satisfaction with the outcome, stating, “Through this successful rights issue, we reduce Finnair’s financing costs, support strategy execution to drive sustainable, profitable growth, and ensure the ability for future investments.”

The primary objectives of the rights issue were to bolster Finnair’s financial position, lower financing costs, and repay a loan to its majority Finnish government owner. On November 24, Finnair confirmed the full repayment, including interest, of a EUR400 million (USD438 million) capital loan provided by the state of Finland. Consequently, the government acquired additional shares worth EUR318.6 million (USD348 million) after offsetting Finnair’s capital loan with the subscription price.

The last day of trading for Finnair’s existing (interim) shares is anticipated to be around November 24. Subsequently, the newly issued shares will be registered with the Finnish Trade Register on the same day, with the interim shares merging with the new shares around November 27. The consolidated shares will commence trading on the Nasdaq Helsinki exchange on the same day.

Finnair, operating with a fleet of 80 aircraft and serving 104 destinations in 39 countries, recently returned to profitability. However, the airline faces uncertainties in the medium term due to regional geopolitical issues, high inflation, and elevated interest rates.