ID :
101453
Thu, 01/21/2010 - 07:55
Auther :
Shortlink :
https://www.oananews.org//node/101453
The shortlink copeid
Fallout from JAL's bankruptcy spreads across banks, trading houses+
TOKYO, Jan. 20 Kyodo - The fallout from the bankruptcy of Japan Airlines Corp. spread Wednesday across trading houses and financial institutions as they warned of losses from their shareholdings and loans linked to the country's biggest carrier.
According to Moody's Investors Service, a U.S. rating agency, Japanese trading
conglomerates face the possibility of writing off between 60 to 70 billion yen
in total after the airline filed for court protection from creditors on
Tuesday.
Six of Japan's major trading houses have each invested between 5 billion yen
and 20 billion yen in JAL's preferred shares to shore up the carrier's
financial base in the past.
Earlier in the day, Tokyo-based trading house Sojitz Corp. said it would write
off 15 billion yen in the October to December quarter due to losses incurred
from holdings of JAL's preferred shares.
Under the rehabilitation plan compiled by a government-backed body, which will
sponsor JAL's turnaround, preferred shareholders will face a 100 percent equity
reduction and the company's shares will be delisted on Feb. 20.
Although Sojitz said it is still studying the impact on earnings results for
the full year through March, the write-off would wipe out more than half of the
27 billion yen in net profit it projects for the whole of fiscal 2009.
JAL shares closed Wednesday at a fresh record-low of 2 yen, down 3 yen, or 60
percent, from a day earlier, as delisting would render the shares worthless.
Meanwhile, Mitsui Life Insurance Co. and smaller financial institutions
including Shinkin Central Bank, Joyo Bank and Shimizu Bank also warned their
loans to JAL may turn sour or face delays in recovering.
Mitsui Life Insurance, for example, has been asked to waive about 6.6 billion
yen of the 8 billion yen in loans it extended to JAL as part of the
state-backed rehabilitation plan.
Separately, All Nippon Airways Co. President Shinichiro Ito urged the
government to ensure a ''fair and just environment for competition'' as JAL
goes through a turnaround process funded by massive public funds.
''It's going to be problematic if (JAL) begins selling discount tickets on the
back of public funds and disrupts market order,'' Ito told reporters after
visiting the Land, Infrastructure, Transport and Tourism Ministry.
Ryuhei Maeda, director general of the ministry's civil aviation bureau,
emphasized that government ''aid is necessary for JAL's revival and would not
result in an unfair treatment between airline companies.''
Officials at rival ANA, which has not depended on public funds to weather an
industry-wide slump caused by the global economic recession, have expressed
concerns about JAL vastly shoring up its financial and competitive strength by
tapping into state money.
To keep debt-ridden JAL afloat, the state-backed Enterprise Turnaround
Initiative Corp. of Japan will invest 300 billion yen in the carrier and set
aside a credit line of 600 billion yen with the state-owned Development Bank of
Japan.
==Kyodo
According to Moody's Investors Service, a U.S. rating agency, Japanese trading
conglomerates face the possibility of writing off between 60 to 70 billion yen
in total after the airline filed for court protection from creditors on
Tuesday.
Six of Japan's major trading houses have each invested between 5 billion yen
and 20 billion yen in JAL's preferred shares to shore up the carrier's
financial base in the past.
Earlier in the day, Tokyo-based trading house Sojitz Corp. said it would write
off 15 billion yen in the October to December quarter due to losses incurred
from holdings of JAL's preferred shares.
Under the rehabilitation plan compiled by a government-backed body, which will
sponsor JAL's turnaround, preferred shareholders will face a 100 percent equity
reduction and the company's shares will be delisted on Feb. 20.
Although Sojitz said it is still studying the impact on earnings results for
the full year through March, the write-off would wipe out more than half of the
27 billion yen in net profit it projects for the whole of fiscal 2009.
JAL shares closed Wednesday at a fresh record-low of 2 yen, down 3 yen, or 60
percent, from a day earlier, as delisting would render the shares worthless.
Meanwhile, Mitsui Life Insurance Co. and smaller financial institutions
including Shinkin Central Bank, Joyo Bank and Shimizu Bank also warned their
loans to JAL may turn sour or face delays in recovering.
Mitsui Life Insurance, for example, has been asked to waive about 6.6 billion
yen of the 8 billion yen in loans it extended to JAL as part of the
state-backed rehabilitation plan.
Separately, All Nippon Airways Co. President Shinichiro Ito urged the
government to ensure a ''fair and just environment for competition'' as JAL
goes through a turnaround process funded by massive public funds.
''It's going to be problematic if (JAL) begins selling discount tickets on the
back of public funds and disrupts market order,'' Ito told reporters after
visiting the Land, Infrastructure, Transport and Tourism Ministry.
Ryuhei Maeda, director general of the ministry's civil aviation bureau,
emphasized that government ''aid is necessary for JAL's revival and would not
result in an unfair treatment between airline companies.''
Officials at rival ANA, which has not depended on public funds to weather an
industry-wide slump caused by the global economic recession, have expressed
concerns about JAL vastly shoring up its financial and competitive strength by
tapping into state money.
To keep debt-ridden JAL afloat, the state-backed Enterprise Turnaround
Initiative Corp. of Japan will invest 300 billion yen in the carrier and set
aside a credit line of 600 billion yen with the state-owned Development Bank of
Japan.
==Kyodo
