New share offering gives Finnair hope

According to ainonline.com Finnair intends to raise €500 million (US$565 million) with a proposed share offering in an effort to boost its flagging liquidity due to the impact of the COVID-19 pandemic. The subscription period for the share offers stars on 17 June and ends on 1 July. The Finnish government which holds some 55.9% of the airline’s outstanding shares, has committed to subscribe.

On 9 June the European Commission approved the country’s participation under the condition that its share in the company would not increase. In return, the Finnish government has agreed to limitations on management pay from 2020 through 2022 and restrictions on acquisitions of more than 10% of competitors or other operators in the same line of business.

The offering accounts for part of Finnair’s wider recapitalisation plan for 2020, which includes entry into a new €600 million pension premium loan agreement and possible sale and leaseback arrangements involving unencumbered aircraft. The government of Finland has guaranteed 90% of the pension premium loan’s principal, while Nordea Bank has guaranteed the remaining 10%.

“Finnair is determined to continue on its long-term strategic path despite temporary adjustments related to the COVID-19 pandemic and aims to ensure that the company remains a competitive airline company in the future,” said the airline in its statement. “The company’s management believes that air traffic will, upon expiration of the COVID-19 related travel restrictions, still be a growth business, in which Finnair targets sustainable, profitable growth, supported by a strategy based on a geographical competitive advantage and strong ownership structure.”