INCJ, First Eastern in partial exit from Japanese airline

As a result of the transaction, INCJ and First Eastern will reduce their stakes from 28% to 15.1% and from 33.3% to 17.9%, respectively. It implies a return of about JPY13.9 billion for INCJ and JPY16.5 billion for First Eastern. Tokyo-based airline operator ANA Group, will increase its interest from 38.7% to 67%.

In 2010, INCJ and First Eastern each invested about $120 million in ANA as part of a plan to develop a new company alongside the aviation group. The GPs each initially acquired 33.3% stakes in the project, with ANA retaining the remaining 33.4%. Peach was formally founded a year later.

It is touted as Japan’s first low-cost carrier with a fleet of 18 twin-engine airliners servicing 13 international and 14 domestic routes. It claimed sales of JPY47.9 billion and operating profit of JPY6.1 billion for the 2015 financial year. Consolidation of ANA’s ownership is being pursued to optimize a pan-Asian expansion effort.

“We are extremely grateful for the continued support of our three shareholder companies as we steadily implement our ambitious development plans and contribute to meeting Japan’s goal of attracting 40 million inbound passengers by 2020 and revitalizing its regions,” Peach CEO Shinichi Inoue said in a statement. “Peach will strive to expand and develop and maintain its uniqueness with the backing of the ANA Group as a stable shareholder.”

Last week, the Japanese government’s tourism unit confirmed that 24 million foreigners had visited the country in 2016, marking the third consecutive annual increase. The country is aiming to attract 60 million visitors spending some JPY15 trillion a year by 2020. Other private equity attention to this space includes a JPY1.4 billion investment by AID Partners and Cool Japan Fund in vacations rentals company Hyakusenrenma.

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• Topics
• North Asia
• Infrastructure
• Consumer
• Exits
• Buyback
• Japan
• Innovation Network Corp. of Japan (INCJ)
• First Eastern Investment Group
• Transportation