(Reuters) - Finnair (FIA1S.HE) launched a share sale on Wednesday to raise 500 million euros ($568 million) from its existing investors, almost as much as its current market value as it seeks to strengthen its finances to cope with the coronavirus crisis.
Airlines across the world have been scrambling to raise cash and slash costs after lockdowns to contain the virus pandemic brought global air travel to a virtual halt.
Finnair, which is 55.8% state-owned, has said it was losing about 2 million euros a day as 90% of its flights were grounded, and has warned it could take two to three years for air traffic to recover to 2019 levels.
The airline, which has issued two profit warnings this year, last month received state and bank guarantees for a 600 million euro loan and said it was implementing a funding plan that included drawing on available credit lines, as well as sales and leasebacks of planes.
“To achieve the goals of the company despite the exceptional circumstances, Finnair considers it prudent to seek to strengthen its balance sheet,” it said in a statement.
Shareholders will receive one subscription right for each share, entitling them to subscribe for ten offer shares for 0.40 euros each, it said.
At 0820 GMT, Finnair shares were up 2.3% at 4.17 euros.
As a result of the fully underwritten offering, the total number of the shares will increase from 128.1 million to a maximum of 1.4 billion.
Analysts noted the significant dilution for shareholders that decide not to take part in the offering.
Finland has committed to the issue and banks managing the offer have committed to subscribe to any rights left by shareholders.
Reporting by Tarmo Virki in Tallinn; Editing by Louise Heavens and Mark Potter