The Qantas Airways Limited (ASX: QAN) share price has returned from its trading halt this morning and tumbled lower.
The airline operator’s shares are currently down 6% to $3.92.
Why was the Qantas share price in a trading halt?
Qantas requested a trading halt on Thursday while it launched a $1.9 billion equity raising.
This equity raising comprises a $1,360 million fully underwritten placement to institutional investors and a ~$500 million share purchase plan.
This morning Qantas revealed that it has successfully completed its placement through the issue of approximately 372.7 million new shares to institutional investors at a price of $3.65 per new share. This represents a 12.9% discount to its last close price.
According to the release, Qantas received high levels of interest from both existing institutional shareholders and new investors. This led to demand for the placement significantly exceeding the funds that Qantas was seeking to raise.
The proceeds of the equity raising will be used to accelerate its recovery, strengthen its balance sheet, and position Qantas to capitalise on opportunities aligned with its strategy.
Qantas CEO, Alan Joyce, commented: “The fact that there was significant demand for this offer shows clear support for our recovery plan and confidence in the fundamentals of this business. The plan involves some difficult decisions but we are extremely well positioned to get through this crisis and start growing again on the other side.”
Qantas will now push ahead with its $500 million non-underwritten share purchase plan.
Eligible shareholders will be able to apply for up to $30,000 of new shares free of any brokerage, commission, and transaction costs.
These shares will be priced at the lower of the placement price and a 2.5% discount to the five-day volume weighted average price of Qantas shares up to, and including, the closing date of the share purchase plan (expected to be 22 July 2020).