Finnair details $569mn rights issue, EC okays state role

Finnair (AY, Helsinki Vantaa) has released details of its fully underwritten EUR500 million euro (USD569 million) rights offering, a sum that is almost as much as its current market value. The 55.9% state-owned flag carrier said in a statement on June 10 that shareholders will receive one subscription right for each share held on June 12, and each right will entitle them to subscribe to 10 offer shares for EUR0.40 (USD0.45) per share. As a result of the offering, the total number of the shares in the company may increase from 128,136,115 shares to a maximum of 1,407,401,265. Shareholders who decide not to take part in the offering are likely to see a significant dilution, analysts told Reuters. Finnair said in the statement that it “plans to use the proceeds from the offering to strengthen its equity and liquidity position in the exceptional situation caused by the Covid-19 pandemic as well as to support the execution of Finnair’s strategy. […] To achieve the goals of the company despite the exceptional circumstances, Finnair considers it prudent to seek to strengthen its balance sheet.” The state of Finland has committed to subscribing in full to the issue, and the banks managing the offering – Citigroup Global Markets Limited and Nordea Bank – have committed to subscribing to any rights left by shareholders.