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MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Mitsubishi UFJ Financial Group, Inc.    8306   JP3902900004

MITSUBISHI UFJ FINANCIAL GROUP, INC.

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Japanese airline ANA secures $3.8 billion loan as COVID travel slump bites

10/14/2020 | 10:06am EST
FILE PHOTO: An employee of All Nippon Airways works in front of the company logo at New Chitose airport in Chitose

TOKYO (Reuters) - Japan's biggest airline ANA Holdings Inc has secured $3.8 billion in subordinated loans to bolster funds it needs to survive a slump in air travel caused by COVID-19 travel restrictions, three people with knowledge of the deal said.

While ANA has seen some rebound in domestic flight demand, helped by a government travel campaign, bookings remain below last year's levels, with international air traffic still only a fraction of what it was before the pandemic.

That means ANA like other carriers is burning through cash to maintain jets that are either grounded or flying with too few passengers. In the three months to June 30 ANA reported an operating loss of 159 billion yen ($1.51 billion). It releases its latest quarterly results on Oct. 27.

The latest cash injection, will include 130 billion yen each from Sumitomo Mitsui Financial Group Inc (SMFG) and the state-backed Development Bank of Japan (DBJ), 60 billion yen from Mizuho Financial Group, 50 billion yen from Mitsubishi UFJ Financial Group Inc and 30 billion yen from Sumitomo Mitsui Trust Bank (SMTB), one of the people said, confirming an earlier Kyodo report.

The sources asked not to be identified because they are not authorised to talk to the media.

This is the first major subordinated loan package agreed in Japan since the beginning of the pandemic. Banks usually avoid such risky financing because other lenders are paid first if the borrower goes out of business.

ANA, SMFG, Mizuho and Mitsubishi UFJ declined to comment. The DBJ and SMTB could not immediately be reached.

Following an early round of borrowing, ANA had 517 billion yen in cash at the end of June. For ANA, like other airlines, the key to survival may be to make those funds last as long as possible.

The International Air Transport Association (IATA) last month downgraded its forecast for this year, predicting global passenger traffic will drop by two thirds after fresh coronavirus outbreaks further hurt demand.

ANA last week said it planned to offer voluntary redundancies to some workers, cut end of year bonuses and reduce monthly salaries. It also said it will allow some workers to take up to two years off without pay.

($1 = 105.3400 yen)

($1 = 105.1800 yen)

(Reporting by Takashi Umekawa, Maki Shiraki, Yoshif,umi Takemoto Sam Nussey and Yuki Nitta; Writing by Tim Kelly; Editing by Louise Heavens and Tomasz Janowski)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ANA HOLDINGS INC. -0.54% 2585 End-of-day quote.-29.02%
MITSUBISHI UFJ FINANCIAL GROUP, INC. -0.36% 471.3 End-of-day quote.-20.55%
MIZUHO FINANCIAL GROUP, INC. -1.43% 1382 End-of-day quote.-17.88%
NITTA CORPORATION -0.26% 2317 End-of-day quote.-28.71%
SUMITOMO MITSUI FINANCIAL GROUP, INC. -0.41% 3191 End-of-day quote.-20.98%
SUMITOMO MITSUI TRUST HOLDINGS, INC. -0.06% 3254 End-of-day quote.-24.97%
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Financials
Sales 2021 3 993 B 38 369 M 38 369 M
Net income 2021 635 B 6 103 M 6 103 M
Net Debt 2021 - - -
P/E ratio 2021 9,32x
Yield 2021 5,41%
Capitalization 5 951 B 57 211 M 57 188 M
Capi. / Sales 2021 1,49x
Capi. / Sales 2022 1,53x
Nbr of Employees 150 800
Free-Float 88,5%
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 581,67 JPY
Last Close Price 463,30 JPY
Spread / Highest target 87,8%
Spread / Average Target 25,5%
Spread / Lowest Target -2,87%
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NameTitle
Hironori Kamezawa President & Director
Nobuyuki Hirano Executive Chairman
Takayoshi Futae Group Co-COO & GM-Global Commercial Banking
Tetsuya Yonehana Group CFO & Senior Managing Executive Officer
Hiroki Kameda Group Chief Information Officer
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