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Japan Airlines finalises US$2.7 billion raising to position for post-COVID-19 era

Japan Airlines finalises US$2.7 billion raising to position for post-COVID-19 era

FILE PHOTO: Japan Airlines (JAL) planes sit on the tarmac at New Chitose Airport, in Sapporo, Hokkaido, Japan May 4, 2021. REUTERS/Issei Kato

Japan Airlines (JAL) said on Friday (Sep 10) it had finalised plans to issue ¥300 billion (US$2.73 billion) of hybrid loans and subordinated bonds to help position it for a changed business environment due to the pandemic.

It will raise ¥200 billion from hybrid loans and ¥100 billion from subordinated bonds, the airline said in a statement to the stock exchange.

JAL had announced initial plans for the raising on Thursday but provided more details of the funding mix and uses on Friday.

"We have to make continuous efforts to strengthen the balance sheet further and enhance its financing capability to address drastic changes in the business environment anticipated for the post-COVID-19 era," JAL said.

The airline said the proceeds from the raising would be used to introduce Airbus A350-1000s as its new flagship aircraft, helping it to reduce carbon emissions on international flights.

JAL will also renew its revenue management system for domestic routes and repay other debt with the raising's proceeds, it added.

The airline last month said it expected its cash burn rate to fall to around ¥5 billion a month in the second quarter ending Sep 30 from ¥10 billion to ¥15 billion a month in the first quarter.

Source: Reuters/jt

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