Airline Jet2 has tapped investors for £422 million in a bid to shore up its finances amid the continued cancellation of flights.

The Leeds-based company saw shares slump in value on Friday morning after raising the funds through a share placing and subscriptions.

It issued 35.8 million placing shares and 593,561 subscription shares at 1,180 pence per share.

The company said the fundraiser, which covered shares worth 20% of its capital, was “significantly oversubscribed”.

The board believes that the proceeds will provide sufficient liquidity on an extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment

Jet2 has cancelled its flight programme through to April 15 in response to the latest set of UK travel restrictions.

The Government has launched costly measures for travellers, including hotel quarantine and multiple Covid-19 tests for incoming passengers.

Jet2 executive chairman Philip Meeson said: “The board is grateful to both existing shareholders and new investors for their significant support of this equity issue.

“Based on the indicative scenario-planning undertaken by management, the board believes that the proceeds will provide sufficient liquidity on an extended and likely unpredictable shutdown basis to deal with this continually challenging trading environment.

“Furthermore, the directors believe the fundraise will enable management to continue to adopt a decisive, but prudent, responsible financial management approach; take longer-term strategic decisions to support sustainable long-term profit growth; and improve the ability for Jet2 to exit the pandemic in a stable commercial position so that it is well positioned to capitalise on the upturn opportunity when it arrives.”

Shares in the company were 7.5% lower at 1,200p in early trading on Friday.