Expedia is raising $3.2 billion in new capital as the coronavirus pandemic has stalled travel around the world.
The company is raising $1.2 billion in private placement of perpetual preferred stock and $2 billion in new debt financing. Funds managed by affiliates of Apollo Global Management and Silver Lake will provide the equity investment and will each get a spot on the company's board, according to Expedia. The funding is expected to close May 5.
Expedia said it expects the new funds to strengthen its financial flexibility and liquidity position.
The travel industry at large has been among the hardest hit during the Covid-19 crisis. Airports appear nearly empty and airlines and hotels alike have been forced to deal with a huge wave of cancellations.
Like Expedia, Airbnb has recently raised debt financing to help it ride through the crisis. It raised two separate rounds of $1 billion each this month, one of which included equity and had Silver Lake as a backer. Airbnb has been struggling to make up for losses incurred by hosts due to guest cancellations.
Expedia has signaled that it is already cutting back on costs. Chairman Barry Diller told CNBC last week the company would not even spend $1 billion on advertising this year, a stark contrast with the $5 billion it normally spends. Expedia's stock is down 43% year to date.