UPDATE 1-Orix to raise $1 billion for investments, repay debt

TOKYO, July 2 (Reuters) - Orix Corp (8591.T), Japan's biggest leasing firm and a major property investor, said on Thursday it plans to raise about $1 billion in a public share offering to fund investments and repay debt.

Orix said it will sell 18 million new shares to Japanese and overseas investors later this month, and invest some of the proceeds into real estate, to bolster its financial solutions business and to help it expand in Asia.

The share issue, which was first reported by Reuters on Wednesday, will increase its total number of shares by about 20 percent. [ID:nT112949]

Orix becomes the latest Japanese company to tap the equity market for funds, encouraged by a near 40 percent rally in the Japanese stock market over the past four months amid investor hopes the economy has bottomed out.

All Nippon Airways Co (9202.T), Japan's second-largest airline, said on Wednesday it plans to raise up to $1.9 billion in a stock offering to shore up its finances and to fund new investment. [ID:nT105398]

Nikko Citigroup Ltd, Citigroup Inc's (C.N) Japanese investment arm, and UBS AG (UBSN.VX) will handle the Orix sale in Japan. UBS, Merrill Lynch, Pierce, Fenner & Smith (MLPFS) and Morgan Stanley (MS.N) will arrange the overseas offering.

The shares will be priced between July 13 and July 15.

Orix has been shrinking its asset base and slashing debt as fallout from the global credit crisis sliced into its profits and hit its balance sheet. But it has also been looking to take advantage of the crisis to buy assets cheaply.

The share offering will follow a 150 billion yen convertible bond sale announced in November last year.

A capital raising of 100 billion yen would improve Orix's debt-to-equity ratio to about 4.1 from 4.5, Nomura Securities estimates, helping allay concerns among some investors that it has relied too heavily on debt to finance its operations.

Orix was sitting on a total of 7.2 trillion yen debt as of March.

The announcement was made after the close of trade. Shares in Orix, which fell to a low around 1,700 yen in late February, closed at 5,490 yen.

($1=96.65 Yen) (Reporting by Junko Fujita; Editing by Joseph Radford)