Govt asks creditor banks to waive 220 bn in loans to JAL

Last Updated: Wednesday, October 21, 2009 - 16:52

Tokyo: A government task force on
reconstructing Japan Airlines Corp (JAL) requested four of the
five main creditor banks of the struggling airline to write
off 220 billion yen in loans, sources close to the matter
said.

The recently formed task force of corporate turnaround
experts has also asked the four banks to have 30 billion yen
waived through a debt-for-equity swap, the sources said.
The task force asked the creditor banks -- the
Development Bank of Japan, Mizuho Corporate Bank, Bank of
Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. -- to
share the burden of the debt waiver in accordance with the
amount of their unsecured loans outstanding, the sources
said.

The main creditor banks plan to continue discussions to
seek more detailed explanations over the viability of JAL`s
reconstruction plan such as slashing pension benefits.
The task force plans to compile a reconstruction plan by
the end of this month by obtaining the creditor banks`
consent, the sources said.

Among JAL`s main creditor banks, the Japan Bank for
International Cooperation was exempted from the task force`s
request as all of its loans to the airline are covered by
collateral, the sources said yesterday.

Bureau Report



First Published: Wednesday, October 21, 2009 - 16:52

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