Japan Airlines Co Ltd on Friday said it would raise up to 168 billion yen ($1.62 billion) by selling new shares to shore up its finances as the COVID-19 pandemic hits air travel.
Airlines around the globe are struggling to ride out a pandemic that has cast a dark shadow across the global travel industry. Although Japan hasn’t been hit as hard as the United States and Europe, its travel industry is suffering.
“We intend to use the net proceeds from the issuance of new shares to restructure the JAL Group’s business structure in the post-COVID-19 era,” the airline said in a regulatory filing.
The airline said it planned to use 80 billion yen for investments to accelerate the reduction of carbon emissions, 15 billion yen to restructure for the post COVID-19 era, 5 billion yen to “respond to social needs” after COVID, and the remainder to pay down debt.
JAL said it would sell up as many as 91 million new shares to domestic and international investors, and additional 9.1 million shares in a third-party allotment to its Japanese underwriter. Shares of JAL closed little changed at 1,843 yen in Tokyo before the announcement.