Helloworld undertakes capital raising to boost liquidity

Helloworld has gone to the sharemarket to raise more funds as the global tourism industry tanks amid the coronavirus pandemic.

Travel company Helloworld has launched a $50 million capital raising, flagging the prolonged freezing of the global travel industry has stifled its earning potential.

The travel group noted travel restrictions were likely to remain in place through 2020 and 2021, further impacting its underlying operations.

Australia’s domestic and international tourism markets were grounded following global travel shutdowns sparked by the coronavirus pandemic.

Helloworld said the liquidity injection would boost its capital position to $187.1 million, with the funding intended for operating and capital expenditure through to the end of 2022.

Helloworld will seek to raise $50 million via the sharemarket. Picture: Supplied.

“Helloworld’s liquidity position will be enhanced following completion of the equity raising with sufficient liquidity to provide for operating and capital expenditure through to the end of 2022 assuming ongoing disruption to the international travel markets,” the company said in its statement to the Australian Stock Exchange.

Planes grounded at Sydney Airport. Picture: Cameron Spencer/Getty Images

Helloworld noted domestic travel bookings were increasing as border restrictions across Australia began to ease, with the exception of Victoria.

The equity raising will consist of 30.3 million new shares representing 24.3 per cent of Helloworld’s existing shares on issue.

The capital raising consists of an approximate $27.1 million share placement to institutional investors at $1.65 per share.

Approximately $22.9 million will be issued via an on-market entitlement offer.