BWIA Rights Issue to raise US$40M

THE Board of cash-strapped national airline BWIA yesterday approved a Rights Issue of new shares to be offered to shareholders. A release from the airline said the Rights Issue was intended to raise approximately US$40 million which is urgently required to reduce some critical liabilities and to stabilise the company. The Rights Issue will offer 27 new shares for every one currently held at a price of 20 cents.

The approval of the regulatory authorities is being sought as a matter of urgency. Government has appointed consultants SH and E to advise on the future of BWIA and have agreed to an interim measure that they will be prepared to support the Rights Issue to the extent of the full amount not taken up by other shareholders. Last week, Government injected a similar amount of US$40 million into the airline.

Trade and Industry Minister Ken Valley said Government had agreed to restructure BWIA’s balance sheet by converting some of the debt on the balance sheet into equity, in addition to providing up to US$10 million. In the total package, Government will underwrite US$40 million and US$30 million of that will be the conversion of debt to equity and a further US$10 million will be new money going into BWIA.