ANA Holdings Inc. is in the final stages of negotiations to procure a total of 400 billion yen in subordinated loans from banks. The company is also considering raising fresh capital of about 200 billion yen through a public stock offering. ANA Holdings aims to strengthen its financial base as demand for air travel is expected to remain sluggish due to the spread of the novel coronavirus.
The loans will be provided by the Development Bank of Japan Inc., Sumitomo Mitsui Banking Corp., Mizuho Bank, Ltd., MUFG Bank, Ltd. and Sumitomo Mitsui Trust Bank, Ltd. An official decision on the matter will be made as early as this month.
Subordinated loans have high interest rates and low repayment priority in the event that the borrower becomes unable to repay all of its loans. Since it can be regarded as capital rather than debt, it offers the advantage of improving financial conditions.
In the April-June quarter of 2020, ANA Holdings logged a net loss of 108.8 billion yen. The number of passengers has decreased by 80% to 90% from the previous year. The ANA group based around All Nippon Airways Co., Ltd., a unit of ANA Holdings, has been experiencing a monthly outflow of over 10 billion yen due to personnel and aircraft maintenance costs.
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