British Airways is being forced to raise fresh capital to shore up its shrinking cash resources, chairman Martin Broughton told shareholders on Tuesday. While a rights issue has been ruled out, the airline is discussing with investors other ways of raising liquidity, most probably through a convertible bond issue. The UK flag carrier is the latest of a growing list of leading international carriers to seek to raise funds to strengthen balance sheets, that have been hit by mounting losses and the impact of the recession on demand for air travel, in particular from the most lucrative premium travellers.
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