Webjet ‘calls off’ raising $250m

Webjet chief executive John Guscic.

Webjet is understood to be calling off its equity raising after a book build was scheduled for Wednesday.

It made attempts to tap the market after with its revenue drying up on the back of global travel bans to curb the coronavirus spread.

A term sheet was sent to investors for a bookbuild scheduled for Wednesday for Webjet, with pricing details and the exact raise size to be confirmed.

But the deal is now said to be off.

It is understood that fund managers shied away from the deal because of the $250m it wanted to raise, $190m would go back to clients to whom the money needed to be returned at a time that its revenue is down about 100 per cent.

The transaction also was not underwritten.

It is understood that Webjet hoped to raise about $250m at around $2 per share, a major discount to its last traded share price of $3.76.

DataRoom understands shareholders have held off supporting the raise until Flight Centre comes to market seeking fresh funds, which they believe is a more compelling composition and better positioned to withstand the coronavirus crisis.

It is understood that they may be prepared to support a raise once Flight Centre has raised funds.

Private equity firm Kohlberg Kravis Roberts is weighing a possible investment.

The online travel agent’s shares have not traded since late last week, pending an equity raising.

Webjet’s share price was at $14 and its market value nearly $2bn in January before governments around the world banned non-essential travel to curb the spread of the coronavirus and now its market value is $509.9m.

Working on the possible raise were Goldman Sachs, Ord Minnett and Credit Suisse.