Avation PLC (LON:AVAP), the civil aircraft lessor, has raised £7.5mln to ready itself for the opening up of air travel again post COVID-19.
New shares will be issued to existing and new institutional and professional investors at 110p per share with some directors also taking part.
Avation's customers, which lease planes from the group, have been hit hard by the virtual moratorium on flying during the pandemic but it expects demand for leased planes, in particular, to bounce back strongly once conditions start to normalise.
“In the company's opinion, COVID-19 is likely to lead to positive market conditions, due to the shortage of available aircraft post the pandemic due to retirements and airline suffering from capital constraints, leading to preferences for aircraft to be leased rather than owned.”
The group has focused on preserving its liquidity during the crisis and said today that it considered its COVID-19 strategy to date has been successful.
“Key customers are operational in jurisdictions with less severe impact of COVID-19, aircraft purchase rights support future growth and the Virgin Australia administration is largely dealt with."
The use of proceeds from the placing and subscription will be used to enhance working capital, Avation added.
The company has a fleet of 46 aircraft with 19 commercial airlines customers in 15 countries and has been offering support packages to 14 of these clients.
In February, it also agreed a maturity extension on a key part of its medium-term debt.