Airbus to seek new €15 bln credit facility, suspend dividend

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Aviation giant Airbus SE announced measures to bolster its liquidity and balance sheet in response to the COVID-19 pandemic as it continues to assess the ongoing situation and the impact on its business, customers, suppliers and the industry as a whole.

The Airbus management has received board approval to secure a new credit facility of €15 bln in addition to the existing €3 bln revolving credit facility; withdraw the 2019 dividend proposal of €1.80 per share with a value of €1.4 bln; and suspend the voluntary top up in pension funding. Given the limited visibility due to the evolving COVID-19 situation, the 2020 guidance is withdrawn. The company said.

“We are safeguarding our business to protect the future of Airbus and to ensure we can return to efficient operations once the situation recovers. We have withdrawn our 2020 guidance due to the volatility of the situation. At the same time, we are committed to securing the liquidity of the company at all times through a prudent balance sheet policy. I am convinced that Airbus and the broader aerospace sector will overcome this critical period,” said Airbus Chief Executive Officer Guillaume Faury.

Operational scenarios, including measures to minimise cash requirements, have been identified and will be activated depending on the further development of the pandemic.

With these decisions, the company has significant liquidity available to cope with additional cash requirements related to the coronavirus. Liquidity resources previously standing at approximately €20 bln, comprising around €12 bln in financial assets at hand and around €8 bln in undrawn credit lines, were further bolstered by converting an existing €5 bln credit line into a new facility amounting to €15 bln. Available liquidity now amounts to approximately €30 bln.

Airbus said it intends to secure business continuity for itself even in a protracted crisis.

“Safe and efficient air travel is a key backbone of global economic development and cultural exchange. Airbus therefore highly welcomes governmental efforts around the globe to stabilise this industry by supporting the financial health of its airline customers and its suppliers,” the company said.

The Airbus shareholders’ AGM is scheduled to take place in Amsterdam on 16 April.

“Due to the global outbreak of COVID-19, Airbus discourages physical attendance and strongly encourages shareholders to vote by proxy in line with public health and safety measures,” the company said.