Japan Airlines plans to raise $ 2.7 billion to strengthen finances

Japan Airlines (JAL) planes are seen, amid the coronavirus disease (COVID-19) outbreak, at Tokyo International Airport, commonly known as Haneda Airport in Tokyo, Japan, October 30, 2020. REUTERS / Issei Kato

  • Increase to include subordinated loans, hybrid finance
  • The airline raised $ 1.8 billion through the sale of shares in November 2020
  • Expected its cash consumption rate to decline in the second quarter

TOKYO, Sept. 9 (Reuters) – Japan Airlines Co Ltd (JAL) (9201.T) announced on Thursday that it plans to raise around 300 billion yen ($ 2.7 billion) in subordinated loans and hybrid finance for help it overcome the protracted impact of the crisis. Coronavirus pandemic.

Details of the financing plan will be announced on Friday, the company said in a statement after news outlets including Reuters previously reported on the plan, citing sources.

“We are considering different ways of obtaining financing, in order to prepare for the long-term effects of the spread of coronavirus infections and in order to achieve the growth objectives set out in JAL’s medium-term business plan“, the airline said.

JAL recorded an operating loss of 82.65 billion yen in the first quarter last month, an improvement over the previous year, as pandemic-related cost cuts took effect and demand of trips went from a very low base. Read more

JAL, like other carriers, has depleted its cash reserves to keep the planes and workers it will need when travel demand rebounds. She raised $ 1.8 billion in a stock sale last November.

The airline said last month it expected its cash consumption rate to fall to around 5 billion yen per month in the second quarter ending September 30, from 10 billion to 15 billion yen per month. months in the first trimester.

Last year, rival ANA Holdings Inc (9202.T) raised $ 3.8 billion in subordinated loans and $ 3.2 billion in equity to help it weather the pandemic and finance the purchase of new planes.

JAL shares were down 0.8% in afternoon trading, in line with the broader market decline (.N225).

($ 1 = 110,1600 yen)

Reporting by Maki Shiraki and Ritsuko Ando in Tokyo; additional reporting by Kanishka Singh in Bengaluru; written by Jamie Freed; Editing by Christopher Cushing and Richard Pullin

Our Standards: Thomson Reuters Trust Principles.


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