Tokyo: The government and major creditor
banks of Japan Airlines Corp (JAL) are examining an option to
separate the ailing carrier`s profitable operations from those
making losses to accelerate its rehabilitation, sources close
to the matter said on Tuesday.
They are also studying the possibility of using public
money under a special law to help strengthen JAL`s financial
standing and support its funding, they added.
Dividing the company`s businesses into two is a corporate
restructuring scheme under which profitable operations and
healthy assets are transferred to a new entity while
underperforming operations and loss-making assets are retained
by the company. This will determine debts and losses and
concentrate on rehabilitation work with bailout measures.
Earlier this year, US auto giant General Motors Corp used
the scheme, creating a new government-backed company, General
Motors Co, while filing for Chapter 11 bankruptcy.
The government and creditors consider the scheme as an
option for JAL because some of its creditors fear that the
airline`s financial standing could be worse than it appears
if latent losses such as those on disposal of aircraft are
taken into account, the sources said.
Those creditors became cautious to extend additional
financial help for JAL as the company has yet to show a clear
way out of its chronic state of deficit, they added.