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Japan's ANA to raise $3.2 bln in shares to fund 787 jet purchases

11/27/2020 | 01:44am EST

* ANA will offer a quarter of new shares overseas

* Airline ordered 20 Boeing 787 Dreamliners in February

* ANA may reduce business-class seating in new planes

TOKYO, Nov 27 (Reuters) - Japan's biggest airline ANA Holdings said on Friday it will issue new shares to raise $3.2 billion, much of which will be used to fund its orders of fuel-efficient Boeing 787 Dreamliner jets.

Like other big global airlines ANA has been making cost cuts, including pay reductions, to cope with a coronavirus-driven travel slump.

But while many other airlines have been deferring widebodied plane deliveries to safeguard their finances, ANA has opted to stick with its pre-pandemic 787 orders from Boeing.

It says the 787, which is smaller than other widebody models, will be a cost effective alternative to bigger planes that may struggle to make money even after the coronavirus crisis ends.

"On routes to Europe and the United States we flew the Boeing 777, but after the coronavirus, rather than 777 capacity, the 787 is going to be a better size," ANA Senior Vice President Kimihiro Nakahori said at a press briefing.

In February the airline, which was the launch customer for the carbon-fiber 787, ordered 20 new Dreamliners worth $5 billion at list price, bringing its total orders to 100 planes.

Some of those may be configured with fewer business-class seats, Nakahori said, because ANA expects a quicker rebound in leisure travel.

ANA does not expect its home market to recover for two years, and has forecast the downturn in international travel to last until 2024. The carrier last month forecast a record operating loss of 505 billion yen for the year to March 31.

Its first share issue since 2012 comes after ANA last month secured $3.8 billion in subordinated loans to replenish its cash reserves.

Of the 14 million shares it plans to issue, ANA said it will offer a quarter to overseas investors.

ANA picked Nomura Holdings and Goldman Sachs Group as two of the global coordinators for its first share offering since 2012, sources earlier told Reuters. ANA declined to identify the coordinators. (Reporting by Tim Kelly; Editing by Sam Holmes, Lincoln Feast and Jan Harvey)

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ANA HOLDINGS INC. 1.06% 2233 End-of-day quote.-1.93%
CATHAY PACIFIC AIRWAYS LIMITED -2.16% 6.78 End-of-day quote.-5.44%
MITSUBISHI UFJ FINANCIAL GROUP, INC. -0.62% 480 End-of-day quote.5.24%
MIZUHO FINANCIAL GROUP, INC. -1.07% 1392.5 End-of-day quote.6.50%
NOMURA CO., LTD. 0.75% 806 End-of-day quote.-5.40%
NOMURA HOLDINGS, INC. 0.07% 563 End-of-day quote.3.30%
SUMITOMO MITSUI FINANCIAL GROUP, INC. -0.69% 3316 End-of-day quote.4.02%
THE BOEING COMPANY -4.49% 193.1411 Delayed Quote.-5.00%
THE GOLDMAN SACHS GROUP, INC. -2.86% 274.91 Delayed Quote.7.33%
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