Rolls-Royce Holdings is looking to generate £5 billion ($6.44bn) in new financing as the troubled aerospace company looks to bolster its balance sheet amid falling demand for the planes its engines power.
The London-based jet-engine maker said the debt-financing package to raise about £2bn in equity from a rights issue and a further £3bn in bonds and loans is part of a bid to restructure its operations and improve its financial position as the company grapples with the economic effects of Covid-19.
“The sudden and material effect of the Covid-19 pandemic has had a significant impact on the commercial aviation industry, resulting in a sharp deterioration in the financial performance of our civil aerospace business and, to a lesser extent, our power systems business,” Warren East, chief executive of Rolls-Royce, said in a statement on Thursday.
“The capital raise ... improves our resilience to navigate the current uncertain operating environment. By raising additional capital now, we will improve our liquidity headroom and reduce our level of balance sheet leverage, while supporting disciplined execution and investment to ensure we maximise value from our existing capabilities.”
Britain's best-known engineering company, which also makes engines for ships and powers the UK's nuclear submarines, has been badly hit by the economic fallout from the Covid-pandemic because airlines pay the company according to how many hours its engines fly. Dwindling demand for the wide-body planes its engines power, such as the A380, has seen the maintenance revenue the company collects from operating the jets almost disappear. It recorded a post-tax loss of £5.4bn in the first half of 2020.
The company implemented a series of cost-cutting measures, including 9,000 jobs cuts, in March which generated pre-tax cash savings of £350 million in the first half of 2020, with £1bn in savings expected by the end of the year.
“The stark reality is that Rolls-Royce has already burned through so much cash this year and this additional funding and debt-tied finance really only buys the company modest time," said Saj Ahmad, chief analyst at Strategic Aero Research.
"Critically, this funding doesn’t really change the challenges faced by Rolls-Royce. This is a temporary reprieve and I fear that we could see the company have to address its financial situation within six to 12 months all over again, particularly if air travel remains slammed into the ground as it has been since March 2020."
Under the heavily discounted £2bn rights issue, the company will issue 6.4 billion of new ordinary shares at £0.32 each to investors, which is fully underwritten. The rights issue is subject to shareholder approval at a general meeting on October 27.
Referring to the jobs cuts, Rolls-Royce said 4,800 people "left the business" by the end of August with at least 5,000 cuts by the end end of the year.
"This restructuring, the largest in the Group's history, is intended to deliver a total annual pre-tax cash saving of at least £1.3bn by the end of 2022," Rolls-Royce said.
While reducing headcount and restructuring will over time deliver better cost savings and trim overheads, "these factors are only realised years after changes are enacted and so, the results aren’t immediate or seen overnight" Mr Ahmad said.
Last month, Rolls-Royce unveiled plans to sell its Spanish unit ITP Aero and other assets in a move to raise at least £2bn, while earlier this month there was talk the company was in talks with sovereign wealth funds, including Singapore’s GIC, that it was looking to raise £2.5bn in a rights issue.
Rolls-Royce confirmed on Thursday it had received an indication of support from UK Export Finance for an extension of its 80 per cent guarantee to support an increase of the company’s existing £2bn five-year term loan of up to £1bn – subject to the completion of the rights issue.
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Semi-final, first leg
Wednesday (midnight UAE)
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Tomorrow 2021
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Total votes: 1.8 million
Ashraf Ghani: 923,592 votes
Abdullah Abdullah: 720,841 votes
Fight card
Bantamweight
Siyovush Gulmamadov (TJK) v Rey Nacionales (PHI)
Lightweight
Alexandru Chitoran (ROM) v Hussein Fakhir Abed (SYR)
Catch 74kg
Tohir Zhuraev (TJK) v Omar Hussein (JOR)
Strawweight (Female)
Weronika Zygmunt (POL) v Seo Ye-dam (KOR)
Featherweight
Kaan Ofli (TUR) v Walid Laidi (ALG)
Lightweight
Leandro Martins (BRA) v Abdulla Al Bousheiri (KUW)
Welterweight
Ahmad Labban (LEB) v Sofiane Benchohra (ALG)
Bantamweight
Jaures Dea (CAM) v Nawras Abzakh (JOR)
Lightweight
Mohammed Yahya (UAE) v Glen Ranillo (PHI)
Lightweight
Alan Omer (GER) v Aidan Aguilera (AUS)
Welterweight
Mounir Lazzez (TUN) Sasha Palatnikov (HKG)
Featherweight title bout
Romando Dy (PHI) v Lee Do-gyeom (KOR)
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Friday February 18: v Ireland
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Tuesday February 22: semi-finals
Thursday February 24: final
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The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Read part three: the age of the electric vehicle begins
Read part two: how climate change drove the race for an alternative
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The specs
Engine: 2-litre 4-cylinder and 3.6-litre 6-cylinder
Power: 220 and 280 horsepower
Torque: 350 and 360Nm
Transmission: eight-speed automatic
Price: from Dh136,521 VAT and Dh166,464 VAT
On sale: now
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23-man shortlist for next six Hall of Fame inductees
Tony Adams, David Beckham, Dennis Bergkamp, Sol Campbell, Eric Cantona, Andrew Cole, Ashley Cole, Didier Drogba, Les Ferdinand, Rio Ferdinand, Robbie Fowler, Steven Gerrard, Roy Keane, Frank Lampard, Matt Le Tissier, Michael Owen, Peter Schmeichel, Paul Scholes, John Terry, Robin van Persie, Nemanja Vidic, Patrick Viera, Ian Wright.
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War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
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The specs
Price: From Dh529,000
Engine: 5-litre V8
Transmission: Eight-speed auto
Power: 520hp
Torque: 625Nm
Fuel economy, combined: 12.8L/100km
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part three: the age of the electric vehicle begins
Read part two: how climate change drove the race for an alternative
Read part one: how cars came to the UAE
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National Editorial: Suleimani has been killed, now we must de-escalate
Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Jack Moore: Why the assassination is such a monumental gamble
Matthew Levitt: Iran retains its ability to launch terror attacks
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
Simon Waldman: Cautious Israel keeping a low profile
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Student Of The Year 2
Director: Punit Malhotra
Stars: Tiger Shroff, Tara Sutaria, Ananya Pandey, Aditya Seal
1.5 stars
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Jack Moore: Why the assassination is such a monumental gamble
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The%20Genius%20of%20Their%20Age
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Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Jack Moore: Why the assassination is such a monumental gamble
Matthew Levitt: Iran retains its ability to launch terror attacks
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
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SPEC%20SHEET
Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
RESULTS
5pm: Wathba Stallions Cup Maiden (PA) Dh 70,000 (Dirt) 1,600m
Winner: Samau Xmnsor, Abdul Aziz Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Maiden (PA) Dh 70,000 (D) 1,600m
Winner: Ottoman, Szczepan Mazur, Abdallah Al Hammadi
6pm: Maiden (PA) Dh 70,000 (D) 1,800m
Winner: Sharkh, Patrick Cosgrave, Helal Al Alawi
6.30pm: Handicap (PA) Dh 85,000 (D) 1,800m
Winner: Yaraa, Fernando Jara, Majed Al Jahouri
7pm: Handicap (PA) Dh 70,000 (D) 2,000m
Winner: Maaly Al Reef, Bernardo Pinheiro, Abdallah Al Hammadi
7.30pm: Maiden (PA) Dh 70,000 (D) 1,000m
Winner: Jinjal, Fabrice Veron, Ahmed Al Shemaili
8pm: Handicap (PA) Dh 70,000 (D) 1,000m
Winner: Al Sail, Tadhg O’Shea, Ernst Oertel
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World Mental Health Day
The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
Tomorrow 2021
Company%20Profile
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
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if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
The Bio
Favourite place in UAE: Al Rams pearling village
What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft
Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans
Best time to swim in the sea: When there is enough light to see beneath the surface
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'Dark Waters'
Directed by: Todd Haynes
Starring: Mark Ruffalo, Anne Hathaway, William Jackson Harper
Rating: ****
Mohammed bin Zayed Majlis
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
