Iberia firms up A350-900 order; settles hedges

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By admin August 1, 2014 13:21

Iberia firms up A350-900 order; settles hedges

International Airlines Group (IAG) – holding company of British Airways, Iberia and Vueling – has converted eight A350-900 options into firm orders for Iberia. The airline becomes a new customer for the A350XWB Family, equipped with Rolls Royce Trent XWB engines. IAG secured commercial terms for the A350 aircraft as part of the Group long-haul order announced in April 2013.

Meanwhile, the IAG Board has approved the settlement by Iberia of the derivative transaction over its entire stake in Amadeus IT Holding (Amadeus) that it entered into in August 2012 with Nomura.

The derivative transaction comprised a collar arrangement around Iberia’s total Amadeus shareholding of 33,562,331 ordinary shares. The transaction was a risk management exercise that allowed Iberia to protect and lock-in the value of its Amadeus shares held in August 2012 and retain any improvement in that price by up to 10%.

As part of the settlement, Iberia will transfer (by way of set-off and without there being any physical movement of the shares) its ongoing interest in the shares to Nomura in exchange for €578 million in cash, recording a gain of €576 million before taxes. Settlement will occur in equal instalments over a 100 trading day period commencing on 7th August 2014.

IAG’s gain on disposal in its income statement will be €84 million before taxes (assuming the Amadeus share price remains above €18.15 through the settlement period). The value of the gross assets which are the subject of this transaction at 31st December 2013 was €1,044 million.

The proceeds of the sale will strengthen Iberia’s liquidity and provide funding for the airline’s Transformation Plan.

admin
By admin August 1, 2014 13:21