DAVY VIEW

EasyJet’s proposed 15% equity raise (gross proceeds of c.£400m-450m) along with sale and leaseback transactions will see liquidity proceeds exceeding c.£3bn. Whether this is the appropriate capital structure will depend on cash burn (£3bn on a full grounding over nine months), restructuring (stretch target of flat cost per seat ex -fuel in FY 2021 versus FY 2019) and recovery (30% capacity in peak summer Q4, no guidance but management indicated on the conference call that new bookings were encouraging and pricing quite positive). It is early days.