ANA Holdings Inc. said Friday it will raise up to 332.13 billion yen ($3.2 billion) by issuing new shares to bolster its financial base to weather the impact of the coronavirus pandemic and buy new aircraft.
ANA, the parent company of All Nippon Airways Co., plans to use the proceeds from the offering of up to 140 million shares to purchase wide-body Boeing 787 jets as well as to repay debt.
The latest fundraising plan follows 400 billion yen that the company has already secured in subordinated loans from major Japanese banks.
The fiscal standing of ANA is seen as relatively stable compared with its foreign rivals. But the major airline company is projecting a record net loss of 510 billion yen for the current business year through March as air travel demand will likely remain depressed due to the spread of the novel coronavirus.
Its capital adequacy ratio, a gauge of financial health, fell sharply to 32.3 percent at the end of September from 41.4 percent six months earlier, as it reported a net loss of 188.48 billion yen in the first half. Subordinated loans have a lower repayment priority and borrowers can count part of the amount as capital.
ANA is in the midst of restructuring efforts with plans to reduce its fleet, including Boeing 777s often used for long-distance flights, and cut fixed costs.
The pandemic has also hit ANA rival Japan Airlines Corp. but to a lesser extent as the airline had undergone restructuring in the aftermath of its 2010 bankruptcy. Still, JAL is also raising up to 182.65 billion yen through a share offering to survive the pandemic and cover replacement costs for its fleet.
Global air traffic will not return to levels prior to the pandemic until 2024, according to an estimate by the International Air Transportation Association.
The Japanese government has launched a subsidy program to spur domestic tourism, but a resurgence of coronavirus infections has clouded the outlook for a strong recovery in domestic air travel.