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EasyJet secures Government bailout of 1.4bn pounds
EasyJet has secured a £1.4billion state-backed bailout to help it survive the pandemic.
The five-year loan facility has been underwritten by a group of banks and supported by a partial guarantee from UK Export Finance, a government agency, under its Export Development Guarantee scheme.
The airline said the Export Development Guarantee scheme for commercial loans is available to qualifying UK companies, does not carry preferential rates or require state aid approval, and contains some restrictive covenants including around dividend payments.
EasyJet said the loan will ‘significantly extend and improve EasyJet’s debt maturity profile and strengthen EasyJet’s balance sheet by increasing the level of available liquidity’.
EasyJet also announced that it will repay and cancel part of its shorter term debt during the first quarter of 2021, namely the fully drawn Revolving Credit Facility of $500m and Term Loans of around £400m, and will free up a number of aircraft assets to further strengthen EasyJet’s balance sheet.
Johan Lundgren, easyJet CEO said: "This facility will significantly extend and improve EasyJet’s debt maturity profile and increase the level of liquidity available. EasyJet has taken swift and decisive action, having now secured more than £4.5bn in liquidity since the beginning of the pandemic.
"The loan facility, provided on commercial terms, reflects constructive and collaborative work between EasyJet, multiple banks and UK Export Finance.
"With our unmatched short haul network and trusted brand, EasyJet is well positioned as customers return to the skies in 2021."
By Louise Longman, Contributing Editor (UK)
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