Cash-strapped BA seeks £600m

Friday 17th July 2009

British Airways hopes a new deal issuing bonds to investors and over its pension fund guarantees will boost its liquidity to the tune of £600 million.

The airline also announced a £100 million loss over the three months to the end of June – on revenue of £1.98 billion. In May the annual loss for BA was over £400 million.

A deal with the pension trustees will see around £330 million become available for BA to use up until 2012.

The trustees of the defined benefit pension scheme will release some of the bank guarantees – meaning cash put aside for the pension fund if the airline goes bust can be used to aid the firm.

The BA pension fund had a deficit of some £1.2 billion in September last year.

Some £300 million of convertible five-year bonds will also be issued to existing shareholders.

BA chief executive Willie Walsh said: "Following discussions with institutional investors, we're taking action to improve our liquidity and strengthen our position within the industry.

"This goes hand-in-hand with our cost reduction and efficiency initiatives which are designed to create the right conditions for our sustainable, long-term profitability."

He added: "It also supports our continued investment programme to maintain our position as a leading global premium airline." ADNFCR-1783-ID-19270254-ADNFCR

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