Japan Airlines plans $8.5-bn IPO

Japan Airlines Co Ltd (JAL), the country's national carrier which emerged from bankruptcy last year, seeks to go for an initial public offering (IPO) of approximately ¥663 billion ($8.5 billion), the world's second-largest this year after Facebook Inc's $16-billion IPO in May, the company said in a filing with the ministry of finance.

The airline filed for bankruptcy protection in January 2010 under a state-backed restructuring and revival plan after making a loss of $1.3 billion in a single quarter and an accumulated debt of around $25 billion.

The carrier cut about one-third of its work force, cancelled 49 unprofitable routes, and cut pension benefits as part of its turnaround plan. It exited bankruptcy in March 2011 and paid off its creditors by arranging new loans and capital.

JAL plans to sell around 175 million shares at a price of approximately ¥3,790 per share with 75 per cent of the shares earmarked for the Japanese offering and the remaining 25 per cent will be issued to international investors. JAL shares will be listed on the Tokyo Stock Exchange in September.

It is expected that JAL will use the IPO proceeds to return a ¥350 billion to the state-backed Enterprise Turnaround Initiative of Japan and the remaining ¥313 billion to the government.

JAL's Japanese rival All Nippon Airways (ANA) said in July that it is also planning to raise approximately $2.6 billion through a public offering in order to fund the company's expansion programme, including acquisition of more fuel-efficient Boeing 787 aircraft. (See: All Nippon Airways to raise $2.6 bn in share offering)