The parent company of British Airways, Aer Lingus and Iberia plans to raise the cash via an issue of bonds from 18 May. 

The bonds will be convertible into ordinary shares and are targeted at institutional investors outside Europe and the UK. Investors will redeem their bonds in 2026.

IAG said the move would strengthen its balance sheet, which currently has cash and facilities totaling €10.5 billion. This compares with €9.1 billion before the pandemic. 

IAG said: “Funding in 2020 and 2021 to date has included a €2.7 billion Rights Issue, €1.5 billion government-supported loans, £2.0 billion (€2.2 billion) UK Export Finance loan, €1.2 billion unsecured bonds and €2.6 billion aircraft financings, sale and leaseback transactions and other asset sales.

“In addition, IAG increased and extended its facilities by securing a $1.8 billion (€1.5 billion) three-year Revolving Credit Facility.”