Total
0
Shares
Webjet (ASX:WEB) - Managing Director, John Guscic - The Market Herald
Managing Director, John Guscic
Source: Australian Financial Review
  • Online travel agent Webjet (WEB) will receive another cash top-up, following a €100 million convertible note sale
  • Webjet will walk away with roughly A$160 million in net proceeds from the offering, which will be used to pay off debt
  • Convertible notes are essentially loans, which have cash value and can be converted to shares
  • Under the terms of the sale, the notes will be discounted 2.5 per cent per annum and once converted, each share will be worth over $4 each
  • The notes will mature in 2027, meaning Webjet will need to pay the amount by that date
  • Shares in Webjet are trading down 3.16 per cent, at $3.06 each

Online travel agent Webjet (WEB) will receive another cash top-up, following a €100 million convertible note sale.

The company will walk away from the sale with an estimated A$160 million in net proceeds.

Short term debt, long term gain

In essence, convertible notes are loans which have cash value and can be converted into shares.

Under the terms of the sale, the notes will be discounted 2.5 per cent per annum and paid on a semi-annual basis.

The notes will also be cash-settled, and once converted, each share will be worth over $4 each, subject to adjustment.

The convertible notes will be listed on the Singapore Stock Exchange on July 13, 2020.

While all of the notes sold will mature in 2027, meaning Webjet will need to pay out the loans by that date.

Equity needed

The roughly A$160 million raised will be used by Webjet to pay off $50 million in debt, as well as to fund any future acquisitions, though none have been announced at this stage.

The online travel agent has been severely impacted by COVID-19, as has the entire airline industry, with air travel grounded amid lockdowns.

Shares in Webjet are slightly down following today's announcement, trading for $3.06 cents per share, a drop of 3.16 per cent at 3.06 pm AEST.


Subscribe


WEB by the numbers
More From The Market Herald
Splitit Payments (ASX:SPT) - CEO, Brad Paterson - The Market Herald

" Splitit Payments (ASX:SPT) to raise $90M for growth strategies

Splitit Payments (SPT) has received firm commitments to raise $90 million through a two-tranche share placement.
Keytone Dairy (ASX:KTD) - CEO, Danny Rotman - The Market Herald

" Keytone Dairy (ASX:KTD) launches vegan, ready-to-drink protein range

Keytone Dairy (KTD) has launched a new, vegan-based, ready-to-drink protein product range called Tonik Plant.
Omni Bridgeway (ASX:OBL) - Managing Director & CEO, Andrew Saker - The Market Herald

" Omni Bridgeway (ASX:OBL) reports record income from litigation investments in FY20

Omni Bridgeway (OBL) has posted its portfolio update for the June quarter and the 2020 financial year.
ISX (ASX:ISX) - Managing Director, John Karantzis - The Market Herald

" iSignthis (ASX:ISX) reports fifth consecutive postive operating cashflow quarter

Payment security company iSignthis (ISX) has announced its operating cashflow is over $1.6 million for the second quarter of 2020.