Japan's ANA raises $ three.2 billion price of shares to fund 787 Jet purchases

© Reuters. FILE PHOTO: The All Nippon Airways (ANA) logo can be seen at Tokyo International Airport

TOKYO (Reuters) – Japan's largest airline, ANA Holdings, announced Friday that it will issue new shares to raise $ 3.2 billion. Much of this will be used to fund their orders for fuel efficient Boeing (NYSE 🙂 787 Dreamliner jets.

Like other major global airlines, ANA has cut costs, including wage cuts, to cope with a coronavirus-induced travel slump.

While many other airlines have postponed wide-body aircraft deliveries to protect their finances, ANA has chosen to hold onto its 787 pre-order orders from Boeing.

The 787, which is smaller than other large-capacity models, will be a cost-effective alternative to larger aircraft that may struggle to make money even after the coronavirus crisis ends.

"We flew the Boeing 777 on routes to Europe and the US, but after the coronavirus the 787 will be a larger size than the capacity of the 777," said Kimihiro Nakahori, senior vice president of ANA, at a news conference.

In February, the airline that was the launch customer for the carbon fiber 787 ordered 20 new Dreamliners valued at $ 5 billion at list price and brought its total orders to 100 aircraft.

Some of these could be configured with fewer business class seats, Nakahori said, because ANA expects vacation travel to recover faster.

ANA does not expect its home market to recover in two years and forecasts a decline in international travel through 2024. The airline forecast a record operating loss of 505 billion yen for the year ended March 31 last month.

The first stock offering since 2012 comes after ANA received subordinated loans of $ 3.8 billion last month to replenish its cash reserves.

ANA will offer a quarter of the 14 million shares to be issued to foreign investors.

ANA chose Nomura Holdings (NYSE 🙂 and Goldman Sachs Group (NYSE 🙂 as two of the global coordinators for the first stock offering since 2012, sources previously told Reuters. ANA declined to identify the coordinators.

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