John Menzies plc (LON:MNZS) announced it has raised £22mln via a placing and subscription to shore up its balance sheet.
The services provider said the proceeds will allow it to take advantage of current market conditions and speed up its strategy, as well as reducing leverage.
The group said it is well-placed to grow as the aviation sector recovers from the impact of the pandemic, with a strong liquidity position, a leaner cost base following significant cost actions and a focus on targeted growth.
Shares were priced at 290p each, a 6.6% discount to Tuesday’s closing price, while the shares issued as part of the placing and subscription represent 9% of the company’s issued capital.
Some directors, including chief executive and chairman Philipp Joeinig, subscribed for £5.3mln worth of shares.
In an announcement late on Tuesday, Menzies said trading has been encouraging in the year to date, with underlying profits ahead of previous management forecasts.
As airlines resume their flight schedules, it expects to meet or top underlying profit expectations for 2021.
As at 31 March, net debt was £218mln and total liquidity stood at £126mln.
“Menzies is emerging from the pandemic smaller, but focused and able to capture opportunities in recovery - a testament to strategic delivery and effective cost management,” analysts at Shore Capital commented.
“We continue to see strong earnings recovery potential, underpinning the short-term equity story. As recovery gathers pace, with volumes on a recovery track reflecting vaccine roll-out to combat the pandemic, visibility should continue to improve with the financial performance.”
Shares jumped 5% to 326p on Wednesday morning.