EasyJet PLC borrowed ￡1.1 billion (US$1.35 billion) to shore up its finances during the COVID-19 pandemic, tapping into a British guarantee program in defiance of founder Stelios Haji-Ioannou’s escalating activist campaign.
The British discount carrier accessed ￡600 million in Bank of England-backed commercial paper and requested to draw down ￡500 million from an existing facility that is secured against aircraft, it said in a statement on Monday.
The move comes a day after Haji-Ioannou said that he is trying to oust chief financial officer Andrew Findlay as part of a pressure campaign aimed at canceling ￡4.5 billion of aircraft orders with Airbus SE.
The new loan came through Britain’s COVID Corporate Financing Facility open to investment-grade companies.
With the money, EasyJet said that it would have about ￡2.3 billion to see it through a crisis that has forced it to ground its fleet and idle staff.
The carrier also said that it has reached deals on furlough plans with the unions of its pilots and cabin crew members, and that it would consider further liquidity options “given the possibility of a prolonged grounding.”
EasyJet has also been defending itself against Haji-Ioannou, the carrier’s largest shareholder with a 34 percent stake.
After the company rejected his request for a shareholder meeting to remove one board member, he pressed his case by saying that he would try to remove Findlay.
Haji-Ioannou opposes more loans, saying that ending the Airbus contract for more than 100 A320 series jets and holding off from buying more aircraft is the only way to “preserve the value for all shareholders.”
With travel curtailed by the coronavirus, the discount airline has grounded its fleet to preserve cash.
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