easyJet enlists restructuring firm to cut $1.9bn debt pile

easyJet (U2, London Luton) has enlisted American consulting and restructuring firm AlixPartners in an attempt to refinance its GBP1.4 billion (USD1.9 billion) debt pile and help it with its cash-flow forecasting, The Telegraph newspaper reported. The carrier needs to repay GBP800 million (USD1.1 billion) to various banks by February 2022 as well as a GBP600 million (USD800 million) loan from the United Kingdom government’s Covid Corporate Financing Facility. The bank loans include, according to the company’s most recent financial statements, two term loans signed with separate banks on April 16 for GBP200 million (USD269 million) and USD245 million, respectively, plus USD500 million that was fully drawn down on April 9 from a revolving credit facility signed in February 2015. All are secured against aircraft assets and all are due to mature in February 2022. The Covid Corporate Financing Facility loan, obtained on April 6, is an unsecured, short-term paper issued at a discount and repayable in March 2021. easyJet announced its first-ever full-year loss, of GBP1.3 billion (USD1.75 billion), on November 17. Despite “raising more than GBP3.1 billion [USD4.1 billion] in liquidity to date,” as CEO Johan Lundgren put it in a summary of the full-year financial statements (including more than GBP700 million (USD936 million) from the sale and leaseback of aircraft), easyJet has warned it will need additional state funding from Europe and the UK if it is to survive. Lundgren has already complained that UK financial support for airlines is “far off what other European countries have been doing.” However, the multinational investment bank Rothschild & Co is monitoring the finances of easyJet and other airlines on behalf of UK government ministers. An easyJet spokesperson told the business-focused newspaper City A.M. that “easyJet has been working with AlixPartners since May and they have been providing advice and modelling for the purposes of cash management and forecasting. easyJet will continue to review its liquidity position on a regular basis and will continue to assess further funding opportunities, should the need arise.”