Japan Airlines sets IPO at £5.3bn

Japan Airlines’ 663bn yen (£5.29bn) initial public offering (IPO) is set to be the second-biggest IPO this year after Facebook.

The airline, which went bankrupt in 2010 but has since returned to profit, set the IPO price at 3,790 yen per share this morning. The shares will begin trading in Tokyo on 19 September.

In early 2010, a Japanese government-backed fund invested 350bn yen in Japan Airlines following the airline’s failure to deal with $25bn debts.

The same fund, the Enterprise Turnaround Initiative Corporation of Japan, is selling its 96.5 per cent stake in the IPO.

At the pre-market price, the carrier would trade at a price-to-earnings ratio of 5.3, based on profit forecast for the current business year. Japan Airlines forecasts profits will drop to 150bn yen for 2012.