Finnair has embarked on a €500 million rights issue which will centre on the release of up to 1.279 billion new shares in the company to strengthen its equity and liquidity.
The issue carries conditions including limiting managers’ salaries up to 2022 and restricting it from making acquisitions.
Finnair will not be able to take more than a 10% share of companies in the same line of business for three years.
There are pre-emptive rights for existing shareholders in the company, who will be able to apply for 10 additional shares for every share they already hold on 12 June. Subscription rights “cannot be exercised partially”, the carrier says.
Finnair has disclosed that the subscription price is €0.40, putting the overall value of the shares at €511 million.
The subscription period for the new shares will begin on 17 June and continue until 1 July.
Finland’s government – which is the majority shareholder in the airline, with a near-56% stake – will be able to participate in the share offering after a ruling from the European Commission over state aid.
This ruling assumes that the government’s shareholding in Finnair will not increase beyond “slight variations”, says the carrier.
The government has committed to subscribe for its full allotment of shares, while finance firms Citigroup Global Markets and Nordea Bank will procure buyers for any unsubscribed shares.
Finnair says it is “determined to continue on its long-term strategic path” despite the “temporary adjustments” it has had to make in relation to the coronavirus crisis.
If the rights issue is fully exercised the total number of shares in the company will rise from 128.1 million to more than 1.4 billion.
Finnair will detail the results of the share offering around 7 July.