The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has come under pressure on Tuesday following the release of an update on its equity raising.
At the time of writing the airport operator's shares are down 2.5% to $5.60.
What did Sydney Airport announce?
On Monday Sydney Airport announced the completion of the retail component of its fully underwritten, pro rata accelerated renounceable 1 for 5.15 entitlement offer.
According to the release, approximately 53,000 of the company's retail shareholders elected to partially or fully take up their entitlements.
This amounted to eligible retail shareholders subscribing for approximately 94.2 million new shares worth a total of $430 million, which reflects a participation rate of 62% by value.
Retail shortfall bookbuild.
Given that less than two-thirds of the retail entitlements were taken up by shareholders, the company offered approximately 58.1 million new shares for sale via a retail shortfall bookbuild.
This morning Sydney Airport announced that these shares were successfully offloaded at a price of $5.50 per new share. This represents a premium of $0.94 per new share over the offer price of $4.56 per share.
This brought the gross proceeds from the retail entitlement offer to approximately $695 million. Which, combined with its institutional offer, brings the total raised to $2 billion.
This equity raising leaves Sydney Airport with liquidity of $4.6 billion to ride out the storm.
"Strongly positioned when the recovery emerges."
Sydney Airport's Chairman, Trevor Gerber, was pleased with the support shown for the equity raising.
He commented: "We would like to thank our securityholders for their continued support. The funds raised will enhance our financial resilience in these challenging times and ensure that we are strongly positioned when the recovery emerges."
This echoes comments made by the company's Chief Executive Officer, Geoff Culbert, last month.
He said: "The equity raising will position Sydney Airport for the future. Sydney Airport took pre-emptive action at the start of the COVID-19 pandemic, putting in place significant liquidity which gave us the flexibility to monitor how the situation evolved. Six months into the pandemic, there remains uncertainty as to how long it will take for aviation markets to return to pre-COVID-19 levels."
"Accordingly, Sydney Airport is taking further decisive action to strengthen its balance sheet and to help ensure it remains well capitalised to meet the challenges presented by an uncertain COVID-19 operating environment, and to ensure it is positioned for growth in the future," he added.
