What to watch: Aston Martin raises cash, Intu faces collapse, and easyJet's sale-and-leaseback deal

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The new Aston Martin Valhalla on show at the Silverlink Shopping Park in Wallsend, Newcastle. Photo: Owen Humphreys/PA Images via Getty Images

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Aston Martin raises cash

Shares in luxury car maker Aston Martin (AML.L) fell as much as 10% on Friday, after the company detailed plans to raise fresh cash to bolster its finances.

The struggling car company said it would issue new shares, totalling up to 19.9% of existing stock, to raise fresh cash. Details of a placing price and total targeted to raise were not given but Thursday’s closing price would suggest the company is seeking to raise around £180m ($223m).

Aston Martin said it had also raised £20m through the government-backed Coronavirus Large Business Interruption Loan Scheme and secured another £55m tapping some secured bonds it had issued but not utilised.

“Today we announce further steps to improve financial flexibility in a period of ongoing uncertainty with this additional funding to execute the business plan,” new chief executive Lawrence Stroll said in a statement.

Aston Martin said business operations were starting to return to normal but warned trading “remains challenging.” Second quarter sales are expected to be below first quarter’s take.

Intu faces collapse

Shopping centre owner Intu (INTU.L) faces collapse after failing to reach a deal with creditors.

Intu, which owns Manchester’s Trafford Centre, said on Friday it was “likely” to appoint administrators ahead of a crunch deadline on its debt repayment at midnight tonight.

Shares fell 50% to trade at just 1.8p.

Intu said earlier this week it had lined up KPMG as administrators in case talks with creditors failed.

The company was struggling under a £5bn debt pile even before the COVID-19 crisis hit but the pandemic has worsened problems. Intu collected less than a third of rent due from tenants at its shopping centres in the first quarter of 2020.

EasyJet’s sale-and-leaseback deal

EasyJet (EZJ.L) has raised £206m selling six of its aircrafts in a sale-and-leaseback agreement.

The budget airline said the funds would be used to “maximise liquidity and further strengthen easyJet's financial position”. easyJet hopes to raise up to £650m through sale-and-leaseback agreements in the coming months.

The cost of leasing the aircrafts back is £155m over terms of between 110 months and 122 months.

The aircrafts have been sold to SMBC Aviation Capital and easyJet said the company was its “preferred partner” for similar deals in the future.

Shares in easyJet rose 1.2%.

Stocks rise despite US caseload

European stock markets opened strongly in the green on Friday, despite continued concern globally about the ongoing COVID-19 pandemic.

The FTSE 100 (^FTSE) rose 1% at the open in London, while the DAX (^GDAXI) climbed 0.9% in Frankfurt, and the CAC 40 (^FCHI) in Paris improved by 1%. Gains were broad-based across the continent.

The rise came after a late rally on Wall Street on Thursday that helped stocks close in the green there and buoyed Asian stock markets overnight.

The Nikkei (^N225) closed up 1.1% in Japan, the Shanghai Composite (000001.SS) rose 0.3% and the Shenzen Component (399001.SZ) rose 0.1%.

US futures were pointing to a lower open on Wall Street later today, amid continued concerns about the growth of new COVID-19 cases in the States. The US recorded 39,596 new confirmed cases on Thursday — a new record daily high — and the Texas Governor halted his state’s phased re-opening due to concerns about case growth.

S&P 500 futures (ES=F) were down 0.4%, Dow Jones futures (YM=F) were off 0.7%, and Nasdaq futures (NQ=F) fell 0.3%. All three indexes closed up more than 1% on Thursday.

Lufthansa secures state bailout

Shareholders in German flag carrier Lufthansa (LHA.DE)  have agreed at an extraordinary general meeting to the conditions of a €9bn (£8.1bn, $10.08bn) government bailout, that includes Berlin taking a 20% stake in the airline and getting two seats on the supervisory board.

The airline had almost run out of runway, burning through €1m in cash reserves an hour trying to stay alive. Like its international rivals, Lufthansa was forced to ground most of its fleet for several months as the coronavirus pandemic spread to Europe and across the world.

Berlin will pay €300m for its shares. The rest of the package comprises €5.7bn as a silent capital contribution and €3bn as a loan from state-owned development bank KfW. 

UK car production remains at WWII lows

Car production in the UK remained at a near-standstill in the month of May, with just 5,314 cars rolling off the production lines.

According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), there was a 95.4% drop compared to the same month the year before, making it the worst May since 1946, the year after WWII ended.

May’s production figures show early that the industry is very slowly starting to reboot again — around two-thirds of UK plants have started production — after just 197 cars were produced in April.