Webjet tries again for $332m capital raising

Holiday travel may not be allowed for up to a year as the tourism industry is brought to its knees by COVID-19. Picture: Getty Images

Webjet has announced an equity raising to recapitalise the company at $1.70 per share to secure up to $332m.

According to a term sheet sent to investors, the company has launched an institutional placement and a partially underwritten 1 for 1 entitlement offer to secure at least $275m.

The entitlement offer will secure between $174m and $231m.

The fully underwritten placement will secure $101m by selling down 21.9 per cent of the company.

Working on the trade is Goldman Sachs, Ord Minnett and Credit Suisse.

Shares will be raised at $1.70 each which is a 53.7 per cent discount to the last traded share price of $3.67.

A bookbuild for the raise is being held Wednesday.

It follows earlier efforts a week ago to raise $250m-$300m at about $2 per share as it exists in a market where holiday travel may not be allowed for up to a year as the tourism industry is brought to its knees from the COVID-19 disruptions.

It also comes after private equity firms Kohlberg Kravis Roberts and Bain Capital were weighing a recapitalisation of the online travel agent.

KKR is known to have walked away from the opportunity.

DataRoom understands that Webjet knocked back a proposal by KKR to secure a small equity stake in the business because it came with warrants attached with debt that were problematic for the company.

It is understood that of the $250m that Webjet was trying to raise last week, $150m was for working capital to pay back clients and $150m was to keep the company operational in a difficult environment.

Some market sources say they were being asked for as much as $300m from the company.