(Alliance News) - Goldman Sachs Group Inc and Morgan Stanley, who are advising Rolls-Royce Holdings PLC on its GBP5 billion debt and equity issue plans, have cut their underwriting exposure to the fundraising due to the Covid-19 led market volatility and the US presidential elections, the Financial Times reported on Thursday, citing several sources.
Rolls-Royce on Thursday had outlined plans for a balance sheet boosting GBP2 billion rights issue, a GBP1 billion bond offering and the possibility of GBP2 billion more in loans.
The 10-for-3 rights issue will see Rolls-Royce issue 6.44 billion shares at 32 pence each. The jet engine maker had said the issue effectively represented a 41% discount to its Wednesday closing price of 130p.
Goldman Sachs and Morgan Stanley, along with Rolls-Royce's house broker Jefferies, had originally committed to underwrite 60% of the 6.4 billion new Rolls-Royce shares to be issued in the 10-for-three cash call. The total commitment is now closer to 30%, the newspaper reported.
According to FT, Rolls-Royce, despite the scaling back of underwriting commitment by Goldman Sachs and Morgan Stanley, is still guaranteed to raise the funds after BNP Paribas SA, HSBC Holdings PLC and Citigroup Inc stepped in to join as lead underwriters for the share placing. BNP Paribas, HSBC and Citigroup are also advising the company for the GBP3 billion debt package.
https://www.ft.com/content/771e600c-07c9-48dc-89ed-d5ff010c2edf?segmentId=bf7fa2fd-67ee-cdfa-8261-b2a3edbdf916
By Tapan Panchal; tapanpanchal@alliancenews.com
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