The company’s revolver was most recently refinanced in January 2019. It has a three year maturity and two one year extension options. The maturity and pricing will remain the same after the renegotiations, a company spokesperson confirmed.
Finnair’s lending group has agreed to move the adjusted gearing date used in the facility’s financial covenant from March 31 to April 13. The financial covenant will now include equity levels as well as cash funds.
Finnair must keep cash funds and equity above €400m and equity, excluding hybrid securities, above €150m.
Danske Bank, Nordea, OP Corporate Bank, SEB and Swedbank are the lenders.
The revolver, which remains undrawn, will still be available once the European Commission approves the final €50m tranche of the €400m bailout loan from the Finnish government to be disbursed to the company, the spokesperson added.
Finnair, like all airlines, has had a rough time throughout the pandemic. The company printed a €200m perpetual non-call three year hybrid in August, becoming the first airline to return to the Eurobond market after the crisis began six months earlier, but was forced to pay a nosebleed inducing 10.5% yield.
The company was also the first European company to launch a rights issue after the pandemic began with a €500m deal.
Finland’s flag carrier reported a €149.1m loss for the first quarter of this year, after seeing year on year passenger numbers plummet 83% in March. Cargo accounts for more than 50% of the company’s revenue as a result, though macro events helped the company out in this business line.
“Demand for cargo remained strong, and cargo revenue in March was record high,” said Topi Manner, chief executive officer of the company. “Cargo demand was supported by supply chain challenges caused by the pandemic, which was exacerbated by the Suez Canal blockage.”
Nonetheless, Finnair expects second quarter losses to be of a “similar magnitude” of the losses seen in the last four quarters.
The company has hiked its permanent cost savings target to €170m, up from the €80m first announced on May 2020, the company then raised it to €100m and again to €140m. The cost reductions are from 2019 levels, and the company expects to hit them from 2022. The savings will come from business areas including aircraft leasing, IT, sales, distribution and administration, real estate and staff compensation. In the second half of 2020, the company cut around 600 jobs, when retirement and other attrition is taken into consideration, headcount at the company fell by 1,100 over 2020.