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Japanese Airline ANA To Issue New Shares To Raise $3.2 Billion To Finance Purchase Of 787 Jets

Japanese Airline ANA To Issue New Shares To Raise $3.2 Billion To Finance Purchase Of 787 Jets
Japanese airlines ANA Holdings has decided to continue to purchase the wide bodied 787 planes from Boeing according to its pre-pandemic orders for the planes to the company even while deliveries of such planes are being deferred and delayed by many other airlines across the world in order to protect their finances from depleting.
In addition to forecasting the decline in international air travel to continue till 2024, ANA has also predicted that recovery of its home market of japan in terms of air travel will not happen for the next two years.  
New shares to raise $3.2 billion will be soon issued by it, said ANA, the biggest airlines of Japan and added that a large proportion of the money would be used for financing its already standing orders for the highly fuel efficient 787 Dreamliner jets from Boeing.
The novel coronavirus pandemic induced slump in air travel – particularly international travel, has also forced ANA to cut down on expenditure, just like the other big global airlines, which through measures that included pay cuts for employees, in order to preserve cash.
The airline said that purchasing the 787 jest which are smaller compared to the other wide-body models, will also be a very efficient cost effective alternative to purchasing and using the larger planes which may continue to be loss making for the airlines even after the end of the novel coronavirus pandemic and with international routes opening up again.
"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.
The airline was the first customer of Boeing for its carbon-fibre 787 and in February this year, the airline had placed orders for 20 new Dreamliners from the United Stated aircraft maker in a deal worth $5 billion according to the list price. That put the total order at 100 planes.
Nakahori said that since the company now expects a faster rebound in global leisure travel, some of those 100 planes could be configured with lower number of business class seats.
Last month, the airline forecast a record operating loss of 505 billion yen for its current fiscal year which ends in Mach 2021.
Last month the airline secured $3.8 billion in subordinated loans to augment its cash reserves and the panned issuing of new shares will be the first for it since 2012. The airline will offer a quarter of the new shares to overseas investors and plans to issue a total of 14 million shares, ANA said.
For its first share offering since 2012, Nomura Holdings and Goldman Sachs Group have been selected by ANA as two of the global coordinators, said reports.

Christopher J. Mitchell

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