Rolls-Royce shares hit 16-year lows on Monday after the engine maker announced its plan of a rights issue of up to 2.5 billion pounds ($3.23 billion).
Britain’s popular engineering company, which makes engines for airliners, military jets and ships, said in a statement on Saturday after months of rumours.
On Tuesday, Rolls Royce’ stock was trading at 160.70 Pounds, down by 10.3%. It fell 8% at 165 pence on Monday.
The share value has shed 76% of their value this year. If this downtrend continues, it could make it tougher to raise as much as 2.5 billion pounds from selling new shares.
The COVID-19 pandemic has hit Rolls hard as airlines pay the company according to how many hours its engines fly.
Rolls in August had said it wanted to sell turbine blade maker ITP Aero and other assets to raise at least 2 billion pounds.
It was earlier reported that Rolls-Royce is in discussions with Singapore sovereign wealth to help underpin any fundraising efforts, but UK consent may be needed under rules which limit foreign ownership (FDI) in the country.
Source: Reuters
