Rolls-Royce : dives on capital raise plans

The company plans to raise 5 billion pounds amid COVID-19 issues.

Downtrend 4

The aircraft-engine maker announced its intention to raise gross proceeds of approximately 2 billion pounds by way of a fully underwritten 10 for 3 Rights Issue. In addition, the company intends to commence, in the near future, a Bond Offering to raise gross proceeds of at least 1 billion pounds. Rolls-Royce has also agreed commitments for a new two year term loan facility of 1 billion pounds and received an indication of support in principle from UK Export Finance for an extension of its 80% guarantee to support a potential increase of the Company’s existing 2 billion pounds five year term loan of up to 1 billion pounds.

From a technical point of view, on a daily chart, prices broke below a key support area at 205 and posts new lows since 2003.The 50 day MA remains negatively oriented above prices while the RSI dives in bearish territory. As long as the 160 resistance is not broken, readers may therefore consider further downside towards 100 and 75 in extension.

Source : TradingVIEW, Gain Capital

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