One of the largest Japanese carriers All Nippon Airways Co Ltd (ANA) is planning to raise approximately $2.6 billion through a public share offering in order to fund the company's expansion programme.

''The maximum amount of approximately 211 billion ($2.6 billion) from this offering will be applied to capital expenditure, including acquisition of fuel-efficient Boeing 787 aircraft, by the end of March 2015 for the main purpose of expanding the international route network,'' ANA said in a statement.

The ANA share issue, the country's largest public offering so far this year, will comprise issue of 914 million shares through Japanese and international public offerings, and 86 million shares in third-party allotment.

The pricing of the public issue will be determined during 18-20 July in accordance with Japan Securities Dealers Association's regulations. The subscription period will be 2 days immediately following the pricing date.

Further to the public issue announcement, ANA shares slumped 14 per cent to ¥194 ($2.43) in high volumes yesterday on the Tokyo Stock Exchange (TSE) as investors became apprehensive about dilution of their holdings.

On completion of the offering, the issued shares of ANA shall increase from the present 2,525 million shares to around 3,525 million shares.

The Japanese offering shall include issue of 614 million shares to public and five Japanese underwriters, in which one of the underwriters will act as the Japanese lead manager.

The international offering of 300 million shares including 44 million optional shares, shall be made mainly in Europe where the shares will be purchased by several international underwriters. In the US, the offering shall be restricted to sales to qualified institutional buyers.

It is believed that Nomura, Goldman Sachs Group Inc and JP Morgan Chase & Co are among the underwriters.

The offer price will be calculated as a multiple between 0.9 and 1.0 of the closing price of the shares of ANA on the Tokyo Stock Exchange on the pricing date, taking into account market demand and other conditions, ANA said.

In addition to the Public offering, 86 million shares shall be offered by way of over-allotment that will be borrowed by the Japanese lead manager for the public from certain shareholders. Another 86 million shares shall be offered by way off third-party allotment to the Japanese lead manager next month.

The shares issued in the public offering shall have a lock-in period of 180 days.

Tokyo-based ANA operates services to 49 domestic and 31 international destinations and is a member of the Star Alliance, the largest global airline network. The carrier has a fleet of 226 aircraft predominantly Boeing jets and employs around 14,000 people. Its main hubs are Tokyo and Osaka.

The company's revenue for the 2012 fiscal was around $17.7 billion and net income was $350 million.

Through the public offering, ANA plans to expand its future business portfolio by adding state-of-the-art Boeing 787s to its fleet and establish a financial base to respond to future growth opportunities.

It is believed that ANA has timed the public issue before its main rival Japan Airline Co's (JAL's) planned relisting on the TSE in September, targeting to raise around ¥500 billion ($6.3 billion) through an IPO. JAL has emerged a leaner stronger company after it filed for bankruptcy protection in January 2010.