DAVY VIEW

IAG has announced a fully underwritten capital increase with pre-emptive subscription rights to raise gross proceeds of €2,741m through the issuance of 2,979,443,376 new shares in IAG. The subscription price will be €0.92 for each New Share, representing a 35.9% discount to the TERP (theoretical ex-rights price) based on the closing price of the shares on September 9th 2020. Separately, there has been some reduction in capacity plans for this year and next. Overall, the rights issue - while recapitalising the balance sheet - is highly dilutive and IAG’s market segments (notably long haul and corporate) remain structurally challenged.