Flight Centre to raise A$450m via convertible notes

Flight Centre Travel Group Limited (ASX:FLT) announced the launch of an A$450 million offering of unsecured, unsubordinated convertible notes due 2032. The notes, bearing an annual interest rate of 2.50 per cent, are convertible into fully paid ordinary shares at an initial conversion price of A$16.4313 per ordinary share.

The net proceeds, estimated at approximately A$440 million, will be used to repurchase A$125 million of existing 2.50% convertible notes due 2027 and A$100.2 million of existing 1.625% convertible notes due 2028, with the remainder allocated to pre-fund a possible investor put for the 2028 notes and for general corporate purposes and growth opportunities. The issuance will increase FLT's total liabilities by A$346 million and its equity reserve by A$94 million.

Concurrently, substantial holder L1 Capital Pty Ltd disclosed an on-market purchase of 2,250,000 FPO shares for A$26,887,500.00, increasing its voting power to 7.42%. First Sentier Group Limited also reported becoming a substantial holder with a 5.03% voting power in FLT, holding 10,944,010 ordinary shares, including 7,664,444 shares associated with Mitsubishi UFJ Financial Group, Inc. Additionally, UBS Group AG and its related bodies corporate became a substantial holder with a 5.10% voting power, holding 11,101,934 ordinary shares.