JAL's negative net worth reaches around 1 tril. yen+

TOKYO, June 30 Kyodo -
Japan Airlines Corp., now undergoing a state-backed rehabilitation process,
said Wednesday its negative net worth -- liabilities in excess of assets -- has
expanded to about 1 trillion yen.
The figure, including capital deficits at two subsidiaries, has grown because
of costs involved in a review of the airline's flights and routes as well as a
reexamination of assets, according to JAL and Enterprise Turnaround Initiative
Corp. of Japan, the state-backed administrator overseeing the airline's
rehabilitation.
Hideo Seto, trustee of ETIC, said at a joint press conference with JAL
executives that they are set to formally ask the carrier's creditor banks from
Thursday for an additional debt waiver.
''We can likely negotiate with the banks from tomorrow the exact figures that
would be the basis for our turnaround plan,'' Seto said after reporting about
the increase in the combined liabilities of JAL and its two key subsidiaries,
Japan Airlines International Co. and JAL Capital Co.
He added that the negative net worth has swollen by about 100 billion yen
compared with the earlier projection in January, when it filed for bankruptcy
proceedings.
JAL and ETIC initially planned to ask the creditor banks to forgive about 358.5
billion yen in relation to the carrier's negative net worth of 867.6 billion
yen.
Given the end of August deadline for the submission of JAL's turnaround plan to
the Tokyo District Court, Seto said they will do their best to obtain the
support of creditors by early August.
Sources familiar with the matter said the banks are likely to object to a
larger waiver, dragging out their negotiations with JAL.
But JAL officials will urge the financial institutions to trust in the
airline's turnaround efforts.
''We will draw up a firm turnaround plan and have it executed by our employees
with a new mindset and sense of values,'' said JAL President Masaru Onishi, who
voiced hope that the airline's six international flights from Tokyo's Haneda
airport would help boost the company's sales.
JAL announced Wednesday that it was starting a Haneda-Singapore route on Oct.
31, along with five earlier announced routes linking the airport with San
Francisco, Honolulu, Bangkok, Paris and Taipei's Songshan. JAL revealed
detailed flight schedules and said reservations and ticket sales for these six
flights will start Thursday.
A review of routes, including cuts and reductions based on their profitability,
forms the key pillar of Japan's former flag carrier's turnaround measures.
JAL Chairman Kazuo Inamori indicated that the company's personnel could also be
reviewed following approval of JAL's turnaround plan.
''There is a need to reexamine how the management should be in leading the new
JAL, as well as others matters including personnel,'' Inamori said.
JAL has repeatedly said it expects to return to the black for the current
business year through March 2011, but creditor banks appear reluctant to comply
with an increase in debt waivers.
Akitoshi Nakamura, representative director of ETIC, said the corporation
remains willing, as it was in January, to provide a guarantee for JAL should
the banks finance it.
Asked if JAL could further reduce its flights and personnel, Nakamura said the
figures they will present to the banks are the ''limit,'' and anything further
could disrupt the airline's operations.
Inamori said, ''JAL can and will certainly revive'' and added that he hopes to
stay on as chairman for about two years until the carrier is settled under new
management.
==Kyodo
2010-06-30 20:14:54