Alongside its half year results, International Consolidated Airlines Group (IAG) announced that it will indeed be undertaking a €2.75bn (£2.5bn) rights issue to bring down net debt, increase liquidity and enable it to withstand an extended downturn in global air travel. Net debt was 4.2 times cash profits at the end of June, up from a multiple of 1.4 at the end of December. The airline group says the capital increase will be put to a shareholder vote on 8 September.
Rolls-Royce (RR.) continues to be dogged by rumours that it is mulling an equity raise amid the Covid-19 aviation slump. The engine maker said back in July that is was “reviewing a range of potential options” to strengthen its balance sheet, but “no decisions have been made”. A report from Reuters has cited sources saying that a £1.5bn rights issue could be on the cards for September, with the amount it looks to raise depending on any asset sales. Spanish subsidiary ITP Aero has been mooted as a potential disposal target – it attracted the interest of information technology and defence company Indra Sistemas (ES:IDR) last year.
Elsewhere, the return of UK chip designer Arm to the public domain may be shelved following reports that US company Nvidia (US:NVDA) is looking to take it off of SoftBank’s (JP:9984) hands. According to a report in the Financial Times, there have been discussions over a cash-and-stock deal that would value Arm at more than the $32bn SoftBank paid for it in 2016.