Japan Airline’s – Banks to Agree to Bankruptcy Plan

Japan Airlines Corp.’s largest banks are set to agree to a bankruptcy of Asia’s largest carrier, said four people familiar with the matter.

Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are prepared to go along with a proposed court-led reconstruction, said three people who declined to be identified because the matter is private. The state-owned Development Bank of Japan already agreed to the bankruptcy, according to the other person.

Japan Air is seeking new investors and loan write-offs as it restructures after posting three losses in four years. The government will hold talks on JAL’s future as soon as Jan. 12, Transport Minister Seiji Maehara told reporters two days ago in Tokyo after meeting with Prime Minister Yukio Hatoyama.

“JAL can be reborn as an attractive company should it undergo decisive restructuring,” said Ryota Himeno, an analyst at Mitsubishi UFJ Securities Co. “It’s a positive for JAL if the reports on bankruptcy are true.”

JAL owed 429 billion yen ($4.6 billion) to its four largest creditors at the end of March, according to the company.

Source: Bloomberg