Japan’s StarFlyer mulls capital increase of up to $95mn

StarFlyer (7G, Kita Kyushu) has denied reports that it has resolved to issue new shares through a third-party allotment to raise between JPY7-10 billion yen (USD67-95 million) but confirmed it was considering such a measure. “Over the weekend, some media outlets reported that we had announced a capital increase. It is not true. We have been considering various options for a capital increase to strengthen our financial base, but at the moment it is not true it has been decided. When the matters to be disclosed are decided, we will promptly announce them,” the domestic carrier said in a statement on October 26. The Japanese investment fund Advantage Partners and local companies are being consulted through a securities company to underwrite a third-party allocation of new shares, which would provide funding amid the slump in air travel, sources told the Nikkei on October 24. Advantage Partners is considering taking part, on the condition that existing shareholders also participate. ANA Holdings is the biggest shareholder at StarFlyer with 17.96%. However, the ANA – All Nippon Airways parent itself expects a net loss of about JPY500 billion yen (USD4.77 billion) for the year to March 2021 and is considering cuts to its workforce and fleet, a source told Reuters. StarFlyer currently deploys a fleet of thirteen A320-200s, twelve of which are leased, on five domestic routes with a combined 232 weekly frequencies, linking Tokyo Haneda with Kita Kyushu, Fukuoka, Osaka Kansai, and Ube as well as Fukuoka with Nagoya Chubu, the ch-aviation fleets advanced module shows. It also flies 1x weekly between Kita Kyushu and Taipei Taoyuan. Passenger numbers in September were down 70% from the same month last year, and it lost JPY3.7 billion (USD35 million) for April-June 2020 versus a loss of JPY50 million (USD477,000) for the same period last year. The company’s net assets as of the end of June shrank to JPY3.2 billion (USD30 million).