ID :
96499
Thu, 12/24/2009 - 02:25
Auther :
Shortlink :
https://www.oananews.org//node/96499
The shortlink copeid
Gov't backs out of plan to guarantee JAL loans+
TOKYO, Dec. 22 Kyodo - The government will not guarantee loans and other funding for Japan Airlines Corp., Finance Minister Hirohisa Fujii said Tuesday as the cash-strapped airline seeks a bailout using public funds to keep itself afloat.
But transport minister Seiji Maehara emphasized that the government will stick
to its earlier pledge to ''firmly support'' Japan's top airline regardless of
whether state guarantees are extended or not.
The move to step away from guaranteeing loans comes as uncertainty remains over
whether JAL will be able to implement its proposed drastic cuts to pension
benefits for both retirees and current employees, deemed a prerequisite for
obtaining public understanding for an injection of taxpayers' money to prevent
the airline from facing bankruptcy.
The government was considering providing such financial assistance to the
struggling airline in the second extra budget for the current fiscal year or
the budget for next fiscal year starting April, but Fujii told a news
conference that the government has no such plans since JAL is ''a private
company.''
''It is heading in that direction,'' Fujii said at a news conference when asked
whether the government would no longer consider such assistance even outside
the fiscal 2010 budget.
Last month, the state-owned Development Bank of Japan extended a pool of around
100 billion yen to the airline to keep it operational amid widespread
understanding that the government would provide a guarantee at a later phase.
Fujii said that private companies involved should make their decisions
independently, adding the government should not intervene in their affairs.
Meanwhile, Maehara, minister of land, infrastructure, transport and tourism,
said at a separate news conference that opinion is divided among Cabinet
members about whether it is necessary to attach a guarantee on loans provided
by the DBJ since its shares are already owned 100 percent by the government.
''There are people who say money borrowed from the DBJ is equivalent to
state-guaranteed (funds),'' Maehara said.
JAL, headed for its fourth annual loss in five years, is also seeking broader
and longer-term financial support from a government-backed corporate turnaround
body, the Enterprise Turnaround Initiative Corp. of Japan, which is able to
raise up to 1.6 trillion yen in government-guaranteed funds.
ETIC is able to purchase debt, invest in and provide loans to companies saddled
with liabilities deemed excessive and has 20 billion yen in start-up capital,
with half contributed by the government and the rest by around 130 private
financial institutions.
''Regardless of whether there is a state guarantee or not, I understand the
government will firmly support JAL during its turnaround process to avoid any
interruption to its operations,'' Maehara said.
==Kyodo
But transport minister Seiji Maehara emphasized that the government will stick
to its earlier pledge to ''firmly support'' Japan's top airline regardless of
whether state guarantees are extended or not.
The move to step away from guaranteeing loans comes as uncertainty remains over
whether JAL will be able to implement its proposed drastic cuts to pension
benefits for both retirees and current employees, deemed a prerequisite for
obtaining public understanding for an injection of taxpayers' money to prevent
the airline from facing bankruptcy.
The government was considering providing such financial assistance to the
struggling airline in the second extra budget for the current fiscal year or
the budget for next fiscal year starting April, but Fujii told a news
conference that the government has no such plans since JAL is ''a private
company.''
''It is heading in that direction,'' Fujii said at a news conference when asked
whether the government would no longer consider such assistance even outside
the fiscal 2010 budget.
Last month, the state-owned Development Bank of Japan extended a pool of around
100 billion yen to the airline to keep it operational amid widespread
understanding that the government would provide a guarantee at a later phase.
Fujii said that private companies involved should make their decisions
independently, adding the government should not intervene in their affairs.
Meanwhile, Maehara, minister of land, infrastructure, transport and tourism,
said at a separate news conference that opinion is divided among Cabinet
members about whether it is necessary to attach a guarantee on loans provided
by the DBJ since its shares are already owned 100 percent by the government.
''There are people who say money borrowed from the DBJ is equivalent to
state-guaranteed (funds),'' Maehara said.
JAL, headed for its fourth annual loss in five years, is also seeking broader
and longer-term financial support from a government-backed corporate turnaround
body, the Enterprise Turnaround Initiative Corp. of Japan, which is able to
raise up to 1.6 trillion yen in government-guaranteed funds.
ETIC is able to purchase debt, invest in and provide loans to companies saddled
with liabilities deemed excessive and has 20 billion yen in start-up capital,
with half contributed by the government and the rest by around 130 private
financial institutions.
''Regardless of whether there is a state guarantee or not, I understand the
government will firmly support JAL during its turnaround process to avoid any
interruption to its operations,'' Maehara said.
==Kyodo
