Shares of Rolls-Royce Holdings PLC (LON: RR.) crashed 66% to wipe off two-thirds in value after new shares as part of the £2 billion rights issue began trading today.
New investors have been offered 10 new shares for every three they own at 32p each. The firm says that 99.5% of shareholders supported the rights issue vote.
The heavily-discounted plan will provide the firm with £2 billion in cash, in addition to unlocking £3 billion in additional debt options.
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“We didn’t want to put the business and our shareholders’ interests at risk by gambling on what the situation might look like in the middle of next year,” Chief executive Warren East said.
Moreover, a report in the Financial Times this morning says that the aerospace giant is preparing to close factories temporarily, reduce work hours and cut benefits and one of its factories.
Rolls-Royce share price is down about 66% today to trade at the lowest levels since 2003.
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