VANCOUVER, British Columbia , Sept 9 (Reuters) - In a surprise announcement, WestJet Airlines Ltd said on Wednesday it plans to raise up to C$172.5 million ($160 million) in a share issue for aircraft financing and unspecified capital spending.
WestJet, Canada's second largest airline, said in a statement it had agreed with a syndicate of underwriters led by CIBC to sell 13.39 million shares for C$11.20 each to raise C$150 million.
The underwriters will buy the shares from WestJet and then sell them to the public. They have the option to take up an additional 2.01 million shares, for a total of C$172.5 million.
To issue shares at a time when the stock was somewhat depressed due to a recession-induced drop in air travel came as a surprise to one analyst.
'To dilute shareholders at this time, especially without any specific use for the proceeds, is a bit odd,' said Cameron Doerksen, airline analyst at Versant Partners.
He expects WestJet's stock, which last traded at C$11.70 on the Toronto Stock Exchange before it was halted, to fall on Thursday.
WestJet, one of the few profitable airlines in North America, said last month it would move slower with the planned expansion of its fleet as the economic remains cool.
The Calgary, Alberta-based airline scaled back plans to boost its fleet of Boeing 737s to 121 in four years from 86 at the end of this year. Instead, it plans to have between 108 and 111 planes in 2013 and expects to operate between between 112 and 135 by 2016 depending on lease renewals.
It also announced in August that it is ordering 14 additional Boeing 737s for delivery in the middle of the next decade.
($1=$1.08 Canadian)
(Reporting by Nicole Mordant; editing by Rob Wilson) Keywords: WESTJET/ (nicole.mordant@reuters.com; +1 604 664 7315; Reuters Messaging: nicole.mordant.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WestJet, Canada's second largest airline, said in a statement it had agreed with a syndicate of underwriters led by CIBC to sell 13.39 million shares for C$11.20 each to raise C$150 million.
The underwriters will buy the shares from WestJet and then sell them to the public. They have the option to take up an additional 2.01 million shares, for a total of C$172.5 million.
To issue shares at a time when the stock was somewhat depressed due to a recession-induced drop in air travel came as a surprise to one analyst.
'To dilute shareholders at this time, especially without any specific use for the proceeds, is a bit odd,' said Cameron Doerksen, airline analyst at Versant Partners.
He expects WestJet's stock, which last traded at C$11.70 on the Toronto Stock Exchange before it was halted, to fall on Thursday.
WestJet, one of the few profitable airlines in North America, said last month it would move slower with the planned expansion of its fleet as the economic remains cool.
The Calgary, Alberta-based airline scaled back plans to boost its fleet of Boeing 737s to 121 in four years from 86 at the end of this year. Instead, it plans to have between 108 and 111 planes in 2013 and expects to operate between between 112 and 135 by 2016 depending on lease renewals.
It also announced in August that it is ordering 14 additional Boeing 737s for delivery in the middle of the next decade.
($1=$1.08 Canadian)
(Reporting by Nicole Mordant; editing by Rob Wilson) Keywords: WESTJET/ (nicole.mordant@reuters.com; +1 604 664 7315; Reuters Messaging: nicole.mordant.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
