KEY POINTS:
SYDNEY - Qantas Airways shares have been placed in a trading halt, amid speculation that the national carrier will announce an equity raising of about A$500 million ($629 million) - its first such raising in more than six years.
The capital raising is expected to be by way of a share placement led by UBS and Macquarie Bank, market sources said.
Due to the changed circumstance Qantas is expected to report its half year results today, instead of February 19 as previously scheduled.
Following a query from the Australian Securities Exchange (ASX) on Monday about its falling share price, Qantas requested a trading halt yesterday pending a "material announcement in relation to capital management initiatives".
Qantas said the announcement could not be made immediately, after its share price fell from A$2.49 on January 30 to a close of A$2.29 on Monday.
The trading halt will last until the announcement is made, or until trading opens tomorrow.
Qantas told the ASX it did not have any reason to think that its earnings guidance given in November for the 2008-09 financial year would vary by more than 15 per cent.
The carrier is expecting a full year pre-tax profit "of around A$500 million", down from a pre-tax profit of A$1.4 billion in the year prior.
Qantas, which last completed a major capital raising in 2002 when it sought A$800 million under an entitlement issue to fund a fleet upgrade, would become the latest company in a flood of firms to undertake capital raisings in recent weeks,
Westfield Group, the world's largest listed shopping centre owner, said yesterday it was seeking to raise A$2.9 billion through a share placement, and last month Wesfarmers raised A$2.9 billion in order to reduce its debt.
Shaw Stockbroking analyst Brent Mitchell said he expected Qantas to announce a capital raising of about A$500 million. "I think it would be difficult for them to do any more than that," he said.
Mitchell said the capital raising would ease Qantas' funding pressures and give the company some flexibility.
An aviation analyst, who wished to remain anonymous, said Qantas was facing an assault on all fronts.
"The aviation operating environment can be described as pretty horrible," he said. "Also Qantas has a lot of capex (capital expenditure) coming on with the whole lot of new planes they have on order.
"And they've been on a negative credit watch with Moody's Investors Service for nearly a year and then biting at their backside is falling demand due to the slowing economy."
Qantas has around A$35 billion worth of aircraft on order.
Qantas said in September it had "no plans or no need for a capital raising".
It said at the time it had decided to defer an initial public offering of its frequent flyer business.
- AAP
