Life after near-death for Flight Centre and Southern Cross Austero yesterday as the two companies emerged from trading halts to allow bailout fundraisings to start.
Flight Centre shares opened at $10.85, settled at $11 but then fell to close at $9.99.
After the $700 million injection at $7.20, any new institutional shareholders are looking at a nice capital gain, while those existing holders are left ruing their losses, including the founders who skimped on their contribution to the raising.
Now the hard work starts – over 800 stores to be closed globally including over 400 in Australia. A total of $1.9 billion in annual operating costs will be chopped, meaning thousands of staff and managers.
The company’s $165.6 million ad spend in 2018-19 is over and it will never be as high again, bad news for embattled media companies like Nine, News Corp, Seven West Media and Southern Cross whose shares also relisted and ended the day at 11.5 cents, down 30.3%.
Joining Southern Cross in the doghouse was Seven West Media whose shares fell 4.4% to 65 cents. They hit an all-time low of 6.5 cents during trading.