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All Nippon Airways, Japan's second-largest airline, plans to raise more than 150 billion yen ($1.6 billion) in a public share offering, five sources familiar with the matter said, sending ANA shares tumbling nearly 6 percent.
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Katsumi Kasahara / AP Passenger planes of All Nippon Airways sit at the tarmac in Tokyo. |
The share offering, its first in more than three years, will be used to shore up its finances following a sharp downturn in its core business and for new investment ahead of the expansion of Tokyo's Haneda airport, the sources said.
ANA could announce the planned share offering as early as Wednesday, the sources said, speaking on condition of anonymity because the deal has not been made public.
Separately, a company source said ANA executives were scheduled to hold an extraordinary meeting on Wednesday.
A spokesman for ANA declined to comment.
Raising 150 billion yen would require more than 400 million new shares at Tuesday's closing stock price, boosting the number of shares outstanding by more than 20 percent.
Shares of ANA, which competes with bigger rival Japan Airlines, dropped 5.9 percent to 317 yen. The Nikkei 225 Average [JP;N225
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As the global economic slump hit demand for air travel, ANA reported a group net loss of 4.3 billion yen for the year ended in March, its first annual loss in six years.
By implementing plans to save 73 billion yen of costs, ANA expects to return to profit this year with a 3 billion yen net profit -- though the outlook for travel demand has been clouded somewhat by the global influenza outbreak.
In addition to bolstering its finances, the fundraising is also aimed at preparing ANA for the expansion of Haneda Airport scheduled in the next 12 to 18 months.
ANA is also set to receive the first of 50 Boeing [BA
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] 787 Dreamliners that it has ordered by early next year -- two years after the aircraft was delayed because of production glitches and a mechanics' strike.
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But the delivery schedule has become clouded after the world's No.2 plane maker said late last month that it would delay the first test flight of the Dreamliner, which is 20 percent more fuel efficient than similar-sized aircraft.
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