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Finnair plans share issue to boost finances, eyes dividends

by Paul Morgan

Finnair, the Finnish airline, has announced its plans to raise up to 600 million euros ($632 million) through a rights issue. The airline aims to use the funds to strengthen its financial position and reduce financing costs, support its growth strategy, and enable future investments.

In a statement, Finnair stated that the rights issue will also help reinstate the company’s ability to distribute dividends to its shareholders. The Finnish state and other main owners of the airline have shown their support for the rights issue.

The decision to raise capital through a rights issue comes as Finnair, like many other airlines, continues to grapple with the impact of the COVID-19 pandemic on the aviation industry. The global travel restrictions and reduced passenger demand have severely affected the airline’s operations and financial performance.

By strengthening its financial position, Finnair aims to mitigate the challenges posed by the ongoing uncertainties in the travel industry and position itself for a sustainable and profitable future. The company recognizes the importance of having a robust financial foundation to navigate the post-pandemic recovery phase successfully.

The rights issue will provide existing shareholders with the opportunity to purchase additional shares at a predetermined price. This move allows the airline to raise capital without incurring substantial debt or relying solely on government support.

The aviation industry has been significantly impacted by the pandemic, with many airlines seeking various financial measures to survive and recover. Governments across the globe have provided financial assistance to airlines, including loans and bailouts, to help them weather the crisis.

Finnair’s decision to opt for a rights issue reflects its commitment to safeguarding its long-term financial stability and ensuring its ability to sustainably grow its operations. The support from the Finnish state and other main owners indicates confidence in the airline’s strategy and its prospects of a strong rebound in the future.

As the global travel industry slowly recovers from the effects of the pandemic, airlines are cautiously exploring opportunities to adapt to the new travel landscape. Finnair’s rights issue is a testament to the airline’s proactive approach in securing its future and demonstrates its determination to emerge from the crisis stronger than ever.

It remains to be seen how the market and shareholders will respond to Finnair’s rights issue. However, this capital-raising initiative is a significant step forward for the airline, showing its determination to overcome the challenges posed by the pandemic and chart a path towards sustainable growth and profitability.

In conclusion, Finnair’s announcement of a rights issue to raise up to 600 million euros reflects its commitment to bolster its financial position and position itself for sustainable growth in the post-pandemic travel industry. With the support of the Finnish state and its main owners, the airline aims to navigate the challenges of the aviation industry and ensure its long-term success.

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