(C) Reuters. FILE PHOTO: The “Spirit of Ecstasy” bonnet ornament is seen on a Rolls Royce car at the Top Marques fair in Monaco
LONDON (Reuters) – British aerospace engineer Rolls-Royce (L:RR) said on Friday it was reviewing a range of options to strengthen its balance sheet and position itself for recovery after the COVID-19 pandemic.
“We confirm we are in the early stages of reviewing a range of potential options,” the company said in a statement in response to a Bloomberg report.
“However, no decisions have been made.”
The Bloomberg report said Rolls was examining options including raising equity and disposals, with the sale of its ITP Aero unit one disposal being studied.
Shares in Rolls-Royce, which have lost 57% of their value since the beginning of the year, extended losses to trade down 9.4% at 264 pence at 15.35 GMT.
The company said its financial position and liquidity remained strong.
Roll-Royce, which makes engines for planes such as the Boeing (NYSE:BA) 787 and Airbus 350, has been hit hard by the sharp downturn in air travel caused by the coronavirus pandemic.
It said in May it planned to cut at least 9,000 jobs, or a sixth of its workforce, as it shrinks to fit the smaller market it expects to emerge from the crisis.
Most of the jobs, out of a global staff of 52,000, will go from its civil aerospace business, which generates just over half of its 15 billion pounds ($18 billion) of annual revenues.
Ratings agency Standard & Poor’s cut Rolls’ credit rating to junk in May, saying actions to contain the pandemic, including social-distancing, travel restrictions, and stay-at-home orders, had sharply reduced demand for air travel.
Rolls-Royce reviewing balance sheet options after COVID-19 hit
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.