SYDNEY Jan 31 (Reuters) – Australia’s Flight Centre Travel Group Ltd (FLT.AX) 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)
Reporting by Scott Murdoch in Sydney and Navya Mittal in Bengaluru; Editing by Anil D’Silva and Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles.
Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.