Japan Airlines sets IPO at $8.5bn

Tue, Sep 11, 2012, 01:00

JAPAN AIRLINES’ parent priced a 663 billion yen ($8.5 billion) initial public offering in the carrier at the top of a range after record earnings lured investors to the biggest IPO since Facebook.

The stock price was set at 3,790 yen, according to a regulatory filing yesterday. Shares in the Tokyo-based carrier will begin trading on the city’s stock exchange on September 19th.

JAL will be the world’s fourth-biggest carrier by market capitalisation when it returns to the stock market having completed a trip through bankruptcy protection and a turnaround that included shedding a third of workers, cancelling routes and retiring older aircraft. The airline is being priced at about five times forecast earnings, compared with about 13 times for All Nippon Airways, Japan’s largest carrier.

“It’s a reformed company,” said Mitsushige Akino, who oversees the equivalent of $600 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Even while the overall market is doing badly, there’s a chance for investors to make some short-term profits.”

The airline won’t receive any money from the IPO. – (Bloomberg)