Oct 1, 2020

News | Business | Companies: Rolls-Royce announces plan to raise £3bn


2 minutes - Sorce: BBC

Rolls-Royce employee Image copyright Rolls-Royce

Rolls-Royce has announced it will seek to raise £3bn to bolster its finances after a "sharp deterioration" in civil aerospace because of the pandemic.

The plane engine maker will tap shareholders for £2bn though a rights issue and the remainder will come from issuing new bonds.

There has been speculation for weeks that Rolls-Royce will seek funding.

The company has been severely affected by the slowdown in air travel because of coronavirus.

The rights issue could unlock a further £1bn from UK Export Finance, the government's trade finance body. Rolls-Royce has already borrowed £2bn from the state.

However, Rolls-Royce said an extension of a government loan was dependent on both UK Export Finance and HM Treasury approving the terms of the rights issue. "There is therefore no guarantee that this increase will take place," it said.

The government holds a "golden share" in Rolls-Royce which prevents the company - which is deemed to be of strategic interest to the UK - from coming under foreign contro

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