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Rolls-Royce to Raise $6.5 Billion After Engine Demand Collapses

  • Engine maker to combine rights issue with bond sale and loans
  • Refinancing comes as fleet groundings undermine business model
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Photographer: Nathan Laine/Bloomberg
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Rolls-Royce Holdings Plc unveiled a long-awaited financing plan, targeting up to 5 billion pounds ($6.5 billion) of fresh capital to buttress the U.K. jet-engine-maker against an historic aerospace downturn that still has years to go.

The London-based company will tap existing shareholders for 2 billion pounds in a rights issue, and is seeking a further 3 billion pounds in bonds and loans, it said in a statement Thursday. Rolls-Royce shares fell as much 12%, extending a two-year decline, while its euro bonds jumped by the most since they were issued.