British Airways convertibles issue

graeme at 7:14 a.m. Fri 17 Jul 2009

British Airways is borrowing £300m by issuing convertibles. The potential dilution is significant as the bonds will be convertible into 15%-20% of BA’s issued capital.

The issue effectively confirms recent rumours that we have already mentioned here, as the announcement states that the issue comes “Following discussions with institutional investors”. So who leaked that major shareholders had agreed to the issue?

The airline has also agreed with the trustees of its pension scheme to release $540m of bank guarantees which gives the airline approximately another £330m in new facilities.

Now, what about turning around the actual business?

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