Japan’s ANA set to issue ¥150bn convertible bonds

ANA – All Nippon Airways (NH, Tokyo Haneda) parent ANA Holdings will issue around JPY150 billion yen (USD1.3 billion) worth of bonds due in December 2031, the proceeds from which will be used to support its business structure reform plan announced in October 2020 as well as redeeming maturing bonds and refinancing debt, it announced in a Tokyo Stock Exchange filing on November 24.

The ten-year zero-coupon convertible bonds are set to be issued in the denomination of JPY10 million (USD86,700) each on December 10 (London time). Of the JPY150 billion total, ANA will deploy about JPY70 billion (USD607 million) to redeem bonds maturing in September 2022, while JPY30 billion (USD260 million) will be used to repay the long-term debt that is due to mature by March 2024.

The remaining JPY50 billion (USD433 million) has been allocated “to promote further our business structure reform plan, including investments in reforming our service model and establishing our new third brand.” This third brand, initially announced in October 2020 and referred to once again by group president Shinya Katanozaka in early May 2021, will operate under the name of the restarting ANA charter wing Air Japan (NQ, Tokyo Haneda), initially formed in 1990.

ANA Holdings’ plan for Air Japan is to operate low-cost, medium-haul flights to destinations in the regions of Southeast Asia and Oceania using B787s. ANA currently operates thirty-six B787-8s, thirty-nine B787-9s (with nine more to be delivered), and two B787-10s (with twelve more to be delivered), according to the ch-aviation fleets advanced module.

“In order to cope with the decline in passenger demand caused by the Covid-19 pandemic, we reduced aircraft and human resources by the end of the fiscal year ended March 2021 as our highest priority, […] accelerating the retirement (mainly of widebody) and postponing the planned delivery schedule,” the holding company said in its statement.

“We have been working on the transformation of our group air transportation business portfolio, adapting to the changes in demand quality by, for example, strengthening cooperation between ANA and Peach Aviation (MM, Osaka Kansai) and preparing for the launch of the new third brand, concurrently with optimising and streamlining the ANA brand,” it added. “Through these measures, we aim to improve the group’s profitability in the post-Covid-19 era.”