Sydney Airport Holdings Pty Ltd [ASX:SYD] was one of the big stocks to feel the shockwave of the novel COVID-19 virus. The Sydney Airport share price plummeted amid a sharp decline in both international and domestic passengers.
For the first 16 days of April, provisional data indicates a 96.1% decrease in international passenger traffic and a 97.4% decrease in domestic passenger traffic.
A share price of $6.28 at the time of writing represents a 32.47% hammering since the onset of COVID-19.
Sydney Airport’s reaction to the crisis
In an announcement made on 20 April, Sydney Airport declared that it has now established an additional $850 million dollars of new two- and three-year bank debt facilities.
After establishment of these new facilities, the company noted:
‘[They now] have $430m available cash, $1.75bn of undrawn bank facilities and approximately $600m of new USPP bond market debt (due to be funded in June 2020), for combined liquidity of $2.8bn. This is comfortably in excess of the $1.3bn of debt maturing in the next 12 months and the $150m – $200m of expected capital expenditure over the same period. We also expect to remain compliant with our covenant requirements.’
‘Given the strength of our balance sheet and liquidity position, at this time we do not see the need to raise equity.’
‘The entire industry is hurting but we are all in this together and we are working closely with our airline and commercial partners to make sure everyone has the best shot of making it through to the other side,’ said Sydney Airport CEO, Geoff Culbert.
Outlook for the Sydney Airport share price
Sydney Airport is not out of the woods yet, total traffic for the month of March 2020 was two million passengers, down 45.1% with the world still gripped by COVID-19. Although the addition of the new bank debt facilities could go a long way to help Sydney Airport through the turbulence.
The Sydney Airport share price has moved up strongly over the last week to the resistance level of $6.35. Should Sydney Airport be able to see off the current business headwinds, price levels of $7.13 and $7.65 may come into play.
If you are looking to protect your money during the ‘corona crisis’, check out this free report by my colleague Lachlann Tierney, in it he reveals a two-pronged plan to help you deal with the financial implications of COVID-19. Download your free report here.
For Money Morning