Rolls-Royce shares skid to 17-year low

The UK aerospace engineering firm Rolls-Royce saw its share price tumble on Monday (21 Sept) to its lowest level since 2003, after it confirmed it was considering a fund raising of up to £2.5bn.

The company has struggled during the coronavirus pandemic in line with the travel industry, as airlines pay Rolls-Royce based on the number of hours its engines fly.

In its 2020 half-year results the company noted flying hours fell by 75% in the second quarter alone.

It had already announced plans to restructure the Civil Aerospace business as well as dispose of assets, but with its share price having fallen around 75% since the start of the year from 680p to 160p on 21 September, it has been suggested the company would need to raise more cash.

Rolls-Royce admitted it was “evaluating the merits of raising equity of up to £2.5bn, through a variety of structures”, including equity rights issues, and debt issuance. But added that “no final decisions have been taken” on the methods or precise amount to be raised.