Having suffered a significant drop in the demand, Japan Airlines (JAL) announced plans to raise its capital by $1.6 billion by placing a public offering. The air carrier considered using the raised money for the company’s restructuring and future investments in more energy-efficient jets.

With the aim to strengthen its financial position and boost its capital, the Japanese carrier decided to issue new shares. The airline would place up to 100 million new shares with a discount of up to 6%, announced JAL in a press release. JAL announced that the new public placement would account for 30% of the current air carrier’s outstanding stock of 337 million shares. 

“A prompt recovery of our impaired financial structure is an urgent issue,” announced Japan Airlines in a statement. 

The second-biggest Japanese airline specified that while nearly $965 million would be used for future investments and restructuring the business, the other part of the raised money, approximately $656 million, would be used for the “interest-bearing” debt repayment. JAL claimed that instead of completing harsh job cuts, the airline chose to implement a public offering as a more delicate way to boost its capital. 

The Japanese carrier considered investing the money gained from a public offering in more energy-efficient jets for future operations after the recovery of decreased air travel demand.

Earlier in October, the airline announced its plans to take a new $958 million worth credit line in order to strengthen its business portfolio. JAL expected to face up to a $2.6 billion loss for the financial year of 2020.