EasyJet lifts liquidity by $1.87 billion state-backed loan
EasyJet received a new five-year $1.87 billion loan, partially guaranteed by the United Kingdom government. The new loan will help the British low-carrier to boost its liquidity position.
On January 11, 2021, EasyJet announced a new five-year term loan facility which should help the airline to continue to strengthen its liquidity position. According to the airline statement, the loan was underwritten by several local banks and was supported by a partial guarantee from the UK Export Finance under the Export Development Guarantee scheme.
EasyJet expected that the new $1.87 billion loan will improve its debt maturity profile and stabilize the airline’s balance sheet by increasing the level of available liquidity. Besides, the low-cost carrier aims to repay and cancel a part of its short-term debt of $500 million as well as term loans of up to $540 million in Q1 2021.
“EasyJet has taken swift and decisive action, having now secured more than £4.5 billion ($6 billion) in liquidity since the beginning of the pandemic. The loan [...] provided on commercial terms, reflects constructive and collaborative work between easyJet, multiple banks, and UK Export Finance,“ said Johan Lundgren, the CEO of EasyJet.
The cash-strapped air carrier expected to begin its first steps towards recovery in Spring 2021. However, due to the new COVID-19 pandemic related air travel restrictions, easyJet changed its expectations.
British Airways also received a $2.7 billion partially government-backed loan under the same scheme on January 3, 2021.
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