JAL – The parent company of Japan Airlines (JL, Tokyo Haneda) JAL Group plans to raise around 300 billion yen ($ 2.73 billion) through hybrid financing, a combination of subordinated loans and bonds, to cope to the current “difficult business environment,” he revealed in a Sept. 10 statement.
“We must make continued efforts to further strengthen the balance sheet and improve its financing capacity in order to cope with the drastic changes in the business environment expected for the post-Covid-19 era, while being able to secure liquidity required. […] by achieving the objectives specified in the medium-term management plan, ”he said.
In the name of “sustainable growth”, revenue will be allocated “to present the A350-1000 as our new flagship aircraft which significantly reduces CO2 emissions for international flights”, as well as to renew the revenue management system for internal roads, funds for investments and loans, interest-bearing debt repayment and working capital.
JAL has ordered thirteen A350-1000s, as shown by the advanced ch-aviation fleets module, as well as eight A350-900s. It already operates around ten -900.
The loans will consist of two tranches, the first for 150 billion JPY (1.37 billion USD) to be executed by September 30 with the first repayment due on September 30, 2026, and all to be repaid by September 29. September 2056. Tranche B is up to JPY 50 billion ($ 455 million) to be obtained by November 30, with repayments beginning November 30, 2027, and due in full by November 30 2057. Lenders also include the Development Bank of Japan. like MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation.
The hybrid bond issue will be worth approximately JPY 100 billion ($ 910 million) with pricing and redemption dates to be determined. Mizuho Securities will act as administrative lead on the issue.
Sources told local media as early as last October that JAL was investigating the possibility of raising around 300 billion yen in the form of subordinated loans. Longtime rival ANA Holdings, parent company of ANA – All Nippon Airways (NH, Tokyo Haneda), managed to secure JPY 400 billion (USD 3.8 billion) in subordinated loans from five banks last year, plus $ 3.2 billion in equity.
Last month, JAL Group recorded an operating loss of JPY 82.65 billion (US $ 753 million) in the first quarter, although this is an improvement over the previous year. He said at the time that he expected his rate of cash consumption to drop from JPY 10 billion to JPY 15 billion ($ 90 to $ 137 million) per month in the first quarter to around JPY 5 billion ($ 45 million). ) to the second. He managed to raise around $ 1.8 billion in a stock issue in November 2020.