The broker also considers the exposure to Australasia creates a dilemma, as by opening up faster domestically it may sap Australians' desire to travel internationally. Sarah Thompson, Anthony Macdonald and Tim Boyd. All subscribers should read our terms and conditions, Log in or Subscribe to … Webjet appears to be no closer to solving its financial woes after sounding out major investors on Thursday evening about a potential capital raising.The travel services group, which went into a trading halt on Thursday flagging plans to raise cash from the market, did not respond to requests for comment on Friday as the board mulls its options, which are now expected to include private equity taking a stake.Webjet might be the first of many corporates being forced to go to the market for more cash despite precipitous share price declines. Hence, UBS asserts Webjet is well-placed to accelerate share gains once the market reopens and an overly negative outlook has been priced into the stock.In contrast, CLSA believes the travel restrictions have left the business in a "perilous state". "Working capital is a particular issue, with the broker pointing out that the company's payables exceeded receivables by $178 million as of December 31. The impact on profitability and the delay the recovery is now greater than previously anticipated.Credit Suisse considers there are plenty of acquisition opportunities as a number of travel assets are looking for recapitalisation.

The broker also asserts it is "remarkable" that the acquisition strategy has been reignited, believing this was the “folly” that only recently threatened Webjet's survival. If it were not for the equity raising in April the business would not have survived.The broker also asserts it is "remarkable" that the acquisition strategy has been reignited, believing this was the “folly” that only recently threatened Webjet's survival. "It's clearly a very fluid situation," said Credit Suisse. While acknowledging uncertainty is heightened, UBS assesses the business outlook has improved since April.The company has raised EUR100m in convertible notes, due 2027, with a 2.5% coupon and a conversion price of $4.09. The raising was a win for Webjet, the ASX which had changed the listing rules, and its brokers. "If the sales run rate declines 80 to 90 per cent, the cash shortfall could be material," said Morgan Stanley.Webjet shares crashed more than 70 per cent in less than a month as the virus took an increasing toll on the travel sector and triggered earnings downgrades.Last week, Webjet said there had been a "material escalation" in the cancellation rates of near-term travel and a reduction in overall booking activity. CLSA, not one of the seven stockbrokers monitored daily on the FNArena database, has a target of $2.75 and a Sell rating. Liquidity was $307m as of May 31.Morgans now expects Webjet to be loss-making in FY21 at the operating earnings (EBITDA) level and a full recovery is pushed out to FY23. The company slashed the pay of its executives and board fees in response.This week, Flight Centre accelerated its plans for a business-wide cost savings review in light of the government's unprecedented ban on international travel, with the company warning it would be "significantly impacted".Credit Suisse said Flight Centre - which also went into a trading halt on Thursday while it reassess the latest ructions from the coronavirus - is likely to require a capital raising as well.Flight Centre shares were trading above $65 in July last year, but last traded at just $9.91. UBS, on the other hand, believes Webjet should be able to fund its operations for 14 months even with no revenue, while paying down the working capital unwind and writing off the majority of receivables.With debt facilities to begin maturing in late 2021, Credit Suisse argues liquidity may still be required if the recovery takes longer and the summer of 2021 in the northern hemisphere remains materially affected by the pandemic.Some booking activity has commenced in Australia but the Middle East is shut, and this is around one quarter of bed transaction value and more profitable.

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