KWM advises Qantas on its $1.9bn capital raise
King & Wood Mallesons has advised Qantas on its $1.9 billion capital raise, the second-largest in capital raising during COVID-19.
Firms: King & Wood Mallesons (Qantas)
Deal: King & Wood Mallesons (KWM) has advised Qantas Airways Limited (Qantas) on its institutional placement and share purchase plan targeted to raise up to approximately $1.9 billion.
This is the second-largest capital raising during the COVID-19 crisis, with the largest being for National Australia Bank (NAB), on which KWM also acted.
According to KWM the firm has acted on the majority of the top 10 largest capital raisings during the COVID-19 crisis to date.
Value: $1.9 billion.
Area: Capital raising.
Key players: The KWM team advising on the transaction was led by partners David Friedlander and Paul Schroder, special counsel Amanda Isouard and solicitors Gemma McMahon, Stephanie Rigg, Henry Sit and Jaspreet Nagra.
Deal significance: Qantas Airways has launched a $1.9 billion institutional placement and unveiled its three-year post-COVID recovery plan, which will see 6,000 jobs cut and 100 aircraft grounded for the next 12 months.
Qantas chief executive Alan Joyce said that the fallout from the pandemic would affect the airline sector for many years to come.
“Right now all airlines are in the middle of the biggest crisis our industry has ever faced,” he said.
“Airline revenues have collapsed, entire fleets have been grounded. And the world's biggest carriers are taking extreme action just to survive.”
The deal was launched last Thursday morning, with the help of investment banks Macquarie and JPMorgan. Luminis Partners was also on hand as an adviser.
The fully underwritten placement was priced at $3.65 a share, which represented a 12.9 per cent discount to Qantas’ last close.
It would be followed by a $500 million non-underwritten share purchase plan.
Funds were told the fresh capital would be used to accelerate Qantas’ coronavirus recovery, as well as for balance sheet strengthening.
“We were delighted to have worked with Qantas’ very [high-quality] management team and to have assisted Australia’s national carrier on this landmark capital raising,” Mr Friedlander said.
“We were also involved in Qantas’ previous capital raising in 2009, when we acted for the joint lead managers.”
Mr Schroder also added that acting for the issuers on the Flight Centre and Auckland Airport capital raisings earlier this year has helped cement the firm’s expertise in the aviation and travel industry space.