IAG/BA secures £2bn UK government backed loan
Dec 31, 2020, 2:14 pm
#1
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IAG/BA secures £2bn UK government backed loan
It's being reported this evening that IAG (and hence BA) has secured a loan facility of £2bn from the UK Government. The FT is reporting that no dividends can be paid whilst the loan is outstanding, but I can't quote.easily from the FT...
https://www.barrons.com/articles/vir...an-01609429504
https://www.barrons.com/articles/vir...an-01609429504
British Airways, facing slumping demand due to coronavirus, has secured a £2.0-billion ($2.7-billion, 2.2-billion euros) loan, parent group IAG said Thursday as it also unveiled a Brexit-propelled overhaul. BA, which is slashing thousands of jobs as it battles to survive fallout from the deadly Covid-19 pandemic, also currently faces industrial action in a pay dispute with cargo workers at London's Heathrow airport. "International Airlines Group (IAG) announces that British Airways has received commitments for a five-year term-loan Export Development Guarantee Facility of £2.0 billion underwritten by a syndicate of banks, partially guaranteed by UK Export Finance (UKEF)," the aviation giant said in a statement. "British Airways expects to drawdown the facility in January 2021 subject to agreement of final terms with the lenders and UKEF." UK Export Finance is a state-backed agency which guarantees finance for British companies in order to help them win valuable exports.
Dec 31, 2020, 3:21 pm
#4
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Why does the fact that Just because the loan is given to IAG mean it’s automatically gone to BA,
IAG has a bailout/loan from the Spanish government but not a penny went to BA.
IAG has a bailout/loan from the Spanish government but not a penny went to BA.
Dec 31, 2020, 3:35 pm
#5
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Dec 31, 2020, 3:55 pm
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IAG, which also owns Ireland’s Aer Lingus and Spain’s Iberia, said BA had received commitments for a five-year loan from a syndicate of banks.
The new loan has been facilitated by a state guarantee designed specifically to help UK businesses post Brexit, offered through UK Export Finance (UKEF).
The new loan has been facilitated by a state guarantee designed specifically to help UK businesses post Brexit, offered through UK Export Finance (UKEF).
IAG said BA’s £2bn credit line would be drawn down in January, subject to settlement of terms.
However, BA will not be allowed to pay dividends to its parent for the term of the loan, which could put pressure on IAG’s own capacity for dividend payments.
BA is IAG’s biggest single contributor to group profit, the company confirmed.
However, BA will not be allowed to pay dividends to its parent for the term of the loan, which could put pressure on IAG’s own capacity for dividend payments.
BA is IAG’s biggest single contributor to group profit, the company confirmed.
Dec 31, 2020, 11:42 pm
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Jan 1, 2021, 12:45 am
#10
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Jan 1, 2021, 2:16 am
#11
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Interesting that BA has taken government money, setting furlough aside, before VS!
Jan 1, 2021, 3:48 am
#12
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The European competition has already received over 10bn each, in a mix of grants and loans. BA have taken a loan of 2bn, this is really different to a bailout.
Jan 1, 2021, 6:47 am
#13
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BA also haven't taken any government money if I'm reading this correctly. It is a loan, that will be supplied by banks, and IF they default, the government will guarantee a % of that loan
Jan 1, 2021, 8:15 am
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Jan 1, 2021, 10:15 am
#15
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They did a good job of pushing this out late on New Year's Eve... The reporting of it is quite muted. I was quite surprised when I spotted the news around 9pm that several hours had passed and it hadn't made it onto the FT BA forum.
At least BA are doing stuff seemingly in advance of when it's needed so they are not on the backfoot and hopefully will avoid some eleventh hour deal being needed down the line. I suspect that the next few months are going to be very very lean for BA, and even beyond that it's not looking great.
At least BA are doing stuff seemingly in advance of when it's needed so they are not on the backfoot and hopefully will avoid some eleventh hour deal being needed down the line. I suspect that the next few months are going to be very very lean for BA, and even beyond that it's not looking great.