ANA Plans Y150bn Stock Offering

TOKYO (Nikkei)–All Nippon Airways Co. will raise around 150 billion yen in one of its biggest-ever public offerings of stock, while Orix Corp. is planning to offer about 100 billion yen in shares, The Nikkei learned Tuesday.

ANA’s stock offering, its first in three years, is expected to boost its capital ratio to the upper 20% range from 18% as of March 31. Japan Airlines Corp., on the other hand, has a ratio of 10%. JAL has been cleared for a government-backed syndicated loan.

ANA will make an official announcement Wednesday. It will likely offer a total of 500 million shares at home and abroad as early as July, in which case its outstanding shares will increase by about 25%.

Narita and Haneda airports are scheduled for expansion in 2010, which will create more arrival and departure slots. ANA aims to seize this opportunity. It plans to accelerate the introduction of new, fuel-efficient planes, including the Boeing Co.’s 787 Dreamliner. The airline decided that it needs a major capital increase to continue investment over the medium to long term while keeping its financial base strong.

Orix’s public offering will be its first in eight years and its largest ever. An official announcement is expected as early as this week.

The offering is equivalent to nearly 20% of Orix’s outstanding stock, based on the firm’s market capitalization of about 530 billion yen as of Tuesday.

Orix had been holding off on new investments since the financial market meltdown last fall, but has judged that the bottom of the recession is in sight and wants to strengthen its financial standing. The firm sees a growing number of investment opportunities in domestic real estate, small and midsize businesses, and Asian development projects.

Most of the shares offered by Orix will likely be sold to foreign institutional investors, but domestic investors, both retail and institutional, are also expected to have chances to buy. UBS Securities Japan Ltd. and Nikko Citigroup Ltd. are expected to serve as co-lead underwriters.

(The Nikkei July 1 morning edition)