Shareholders in BA owner IAG back rights issue

FILE PHOTO: British Airways logos are seen on tail fins at Heathrow Airport in west London, Britain, February 23, 2018. REUTERS/Hannah McKay

LONDON (Reuters) - British Airways owner IAG ICAG.L announced the results of its 2.74-billion-euro (£2.50 billion) capital increase, saying on Thursday that it sold 100% of the new shares in its plan to help strengthen its pandemic-hit finances.

The funds will be used to reduce debt and help IAG withstand a prolonged downturn in travel, chalking up a first success for new CEO Luis Gallego who took over from Willie Walsh in September.

“We’re delighted our shareholders have supported the capital raise. It strengthens IAG’s financial and strategic position,” Gallego said in a statement provided by the company.

IAG said on Thursday that it sold 93% of the new shares during the pre-emptive subscription period, with demand for the remaining shares available oversubscribed many times over.

The airline group, which also owns Iberia, had already said that its largest shareholder, Qatar Airways Group, which has a 25.1% holding, had undertaken to subscribe for its pro-rata entitlement in the fully underwritten capital increase.

Reporting by Sarah Young; Editing by Mark Heinrich