Japan Airlines (JAL) will issue bond-type preferred shares.
These shares have no voting rights or conversion rights to common stock, and JAL plans to apply for listing on the Tokyo Stock Exchange’s Prime Market. The dividend will initially be a fixed dividend with an initial spread added to the fixed interest rate for five years, and thereafter a variable dividend with an additional 5%. Additionally, acquisition by cash consideration will be possible from five years after issuance.
Bond-type preferred shares are designed to have properties similar to bonds, such as ensuring that no dividends exceed the preferential dividends set at issuance and preventing dilution of voting rights, while also allowing for the augmentation of shareholders’ equity.
The issuance cap is set at 200 billion yen, and the funds raised are expected to be used for purchasing new equipment and investing in growth in non-aviation sectors, focusing on miles. The underwriters are expected to be Nomura Securities and Daiwa Securities.
