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Japan Airlines Corp. CEO Haruka Nishimatsu apologized Friday for not disclosing to stockholders its recent issue of new shares, which prompted JAL stock to plunge.

Nishimatsu, who replaced Toshiyuki Shinmachi at the end of June after a management shakeup, said the capital increase aimed to show the new management’s determination to turn the struggling carrier around.

“I apologize to our existing shareholders for causing trouble,” Nishimatsu told a news conference at JAL’s head office in Tokyo. “But I ask for their understanding that (the share issue) will benefit them in the long-run,” because the funds will be used to expand the airline’s business, he said.

JAL announced Thursday that it had raised 138.6 billion yen through the new stock issue, far short of the 200 billion yen it had hoped for.

JAL plans to spend 754 billion yen to buy 86 new planes over five years. The carrier hopes to modernize its aging fleet, replacing older planes with smaller, more fuel-efficient ones.

On June 30, JAL announced plans to issue up to 750 million new shares, including the public placement of 700 million shares, equal to 35.3 percent of the company’s outstanding shares as of the end of May.

The announcement drew harsh criticism from shareholders, who complained the value of their shares was being diluted, particularly because the stock issue was not discussed at the company’s annual shareholders’ meeting, despite coming just two days later.

JAL shares tumbled after the announcement, falling from 287 yen per share on June 30 to a year-to-date low of 197 yen on Tuesday. The stock closed at 215 yen on Friday.

The airline is in dire need of cash, not only to purchase new jets but also to relieve the funding pressure from the early redemption of 100 billion yen in convertible bonds by next March.

JAL has been hit hard by rising jet fuel prices and falling passenger numbers, due in part to a series of safety lapses since last year.

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