British Airways parent company, IAG, announced this week that it had raised 390 million euros in convertible bonds to facilitate the takeover of Vueling.
IAG already owned just under 46% of the Spanish carrier and, following an increased offer of 9.25 euros per share that finally won the backing of the board, will now see its stake rise to over 90%. Commenting on the bond issue, Willie Walsh, CEO of IAG had this to say: “We are raising cash to fund our acquisition of Vueling, an airline that will be a great addition to IAG. It will also enable IAG to have cash available to improve general liquidity and improve the credit profile of the group.”
Mr Walsh has already made it clear that Vueling will be run as a stand-alone business within IAG, and not as part of sister Spanish airline, Iberia.
The bonds are due to be issued on 31st May, with Banco Santander, UBS, Morgan Stanley & Barclays jointly managing the transaction.
IAG shares are currently trading at 275.50 pence, a substantial rise from a price of 152.30 pence exactly one year ago. At current prices the airline group is worth just under £5 billion.