By Scott Murdoch and Navya Mittal
SYDNEY -Australia’s Flight Centre Travel Group Ltd is raising A$180 million ($126.94 million) in one of the country’s first major capital raisings of 2023 to buy British travel business Scott Dunn for A$211 million.
The company said on Tuesday it had agreed a deal to buy the business which specialises in tailor-made luxury travel as its banks on a sustained rebound in global travel after the pandemic.
Flight Centre is selling 12.3 million new shares at A$14.60 per share which is a 7.8% discount to the stock’s closing price on Monday.
The purchase will be funded through the A$180 million raising and A$40 million in additional cash on the company’s balance sheet.
A retail investor share purchase plan will also aim to raise up to $A40 million, the company said in its filings.
Flight Centre was one of the largest victims of the COVID-19 pandemic among Australian listed stocks with its share price falling from a peak of A$35.78 in February 2020 to as low as A$8.92 one month later.
Flight Centre said it now expects half-yearly group revenue to more than triple to A$1.10 billion for fiscal 2023.
It also expects to post strong margins and return to profitability, anticipating an underlying EBITDA of A$95 million, compared with a loss of A$184 million last year. It forecasts underlying EBITDA to be in a range of A$250 million to A$280 million in fiscal 2023.
The capital raising has been fully underwritten by Macquarie Capital and UBS.
($1 = 1.4180 Australian dollars)