Swissair shares hit nine-year low
Shares in the aviation conglomerate, Swissair, hit a nine-year low on Monday as investors abandoned the stock amid fears that the company could be brought down by its debt burden. The share price fell more than six per cent in early trading to as low as SFr76.25 ($45.5).
Fears about the group’s future were rekindled by weekend newspaper reports that it may have to seek a debt waiver to avoid going out of business. Analysts say investors are worried that the group’s policy of selling its most profitable units will make it impossible for it to return to profit.
Swissair had a first half loss of SFr234 million and has accelerated the sale of assets and taken the decision to cut 1,250 jobs to restore its financial base. In 2000, it posted a record SFr2.9 billion loss following charges incurred through a disastrous foreign expansion programme.
Swissair officials had no comment on the weekend reports. The group’s chairman, Mario Corti, says he aims to cut the company’s SFr15 billion debt burden by SFr4.1 billion over the next 18 months.
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