British Airways owner IAG (ICAG.L) confirmed it is making plans for a possible rights issue of up to 2.75 billion euros ($3.20 billion) to strengthen its balance sheet.
Reports aay IAG’s share price has lost 66% of its value since the start of the year, as global air travel came to a halt during the coronavirus crisis. On Friday its stock fell more than 4 percent.
IAG said that no final decision has been made on whether or when to proceed with the rights issue, although sources had earlier told Reuters that the company was targeting the end of the summer for the capital raise and hoping to avoid government bailout.
“Being a rescue deal, investors will undoubtedly prefer to have more visibility on air traffic during the summer months,” one said.
IAG reported a first-quarter operating loss before exceptional items of 535 million euros and expects significantly worse losses in the second quarter, reflecting the full extent of travel lockdowns during the pandemic.
It will release its second quarter results on July 31.