Rolls-Royce poised to tap investors for £2.5bn at steep discount to current share price to solve funding crisis
Rolls-Royce is poised to tap investors for £2.5billion at a steep discount to the current share price to solve its funding crisis, The Mail on Sunday understands.
City sources said it was considering pricing the cash call at £1 per share – 35 per cent below Friday’s closing price of £1.54.
The hefty discount – which will come as a blow to shareholders of the FTSE100 giant’ – would encourage investors to back the aerospace giant which has been bled dry during the coronavirus crisis with planes grounded.
Discount: City sources said it was considering pricing the cash call at £1 per share – 35 per cent below Friday’s closing price of £1.54
Following a story in The Mail on Sunday, Rolls confirmed on Monday it was weighing raising up to £2.5billion through ‘a variety of structures including a rights issue and potentially other forms of equity issuance’.
The company added that it could also issue debt.
Sovereign wealth funds from Kuwait and Singapore are reported to be in talks to take stakes in Rolls as part of the fundraise.
Sky News reported on Friday that up to £500million of the £2.5billion has been allocated to sovereign wealth funds.
An announcement from Rolls could come as early as this week.
A spokesman for the company said: ‘We continue to review all funding options to enhance balance sheet resilience and strength.
‘No final decisions have been taken as to whether or when to proceed with any such options, the precise amount that may be raised, or any allotment of shares to any investor including any sovereign wealth fund.’