JAL close to agreeing rehab plan with banks: bankruptcy administrator+

TOKYO, July 28 Kyodo -
Struggling Japan Airlines Corp. is close to agreeing with creditor banks on the
details of its rehabilitation plan, its bankruptcy administrator said
Wednesday, as the airline enters the final stage of negotiations with the banks
over its turnaround measures.
Hideo Seto, trustee of the Enterprise Turnaround Initiative Corp. of Japan, the
state-backed administrator overseeing the rehabilitation, said, ''My perception
is that we are gradually gaining a consensus among concerned parties.''
Seto also indicated that he believes the agreement will be reached before the
Bon holidays in Japan in the middle of August and that JAL's rehabilitation
plan will be presented to the Tokyo District Court by the end of August as
scheduled.
''Currently, we are steadily engaging in efforts toward submitting our
rehabilitation plan by the end of August,'' he said.
As for asking banks for new loans, Seto said negotiations for additional loans
will be put off until September or later after the plan has been submitted to
the court.
''It is right for financial institutions to want to know a little more
regarding the situation of the company and progress on the turnaround plan,''
he said. ''It is inevitable that we would ask (for new loans) after we see
through the reforms we will be implementing and their outcome.''
JAL's negotiations with the banks were a key stumbling block before presenting
its rehabilitation plan to the Tokyo District Court by the end of August as
scheduled.
In an effort to smoothly push the negotiations forward, JAL proposed conditions
for debt restructuring that would be more palatable to its creditor banks than
its earlier plan.
To make the company's rehabilitation more feasible, JAL Chairman Kazuo Inamori
said he sees a new management for JAL being created within the year.
Japan's former national flag carrier, which has been stepping up efforts to
turn itself around through measures including route and personnel cuts, has
been asking for an increase in debt waivers, but banks had been reluctant to
comply.
According to sources close to the matter, JAL and ETIC have asked 31 banks to
waive 383 billion yen in loans to JAL, which would mean the banks waiving 87.5
percent rather than JAL's previous request for a 90 percent cut.
JAL announced the same day that it logged a group operating profit of 16.43
billion yen on revenues of 350.02 billion yen in the April-June period of 2010.
Masaru Onishi, JAL's president, attributed the upbeat results to improved
international passenger and international cargo demand as well as cost-cutting
measures.
==Kyodo
2010-07-28 23:54:15


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