DBJ agrees to expand credit line for Japan Airlines+

TOKYO, Dec. 31 Kyodo -
The state-owned Development Bank of Japan agreed in a meeting with government
officials Thursday to expand its current 100 billion yen credit line for Japan
Airlines Corp. amid speculation that the airline is heading for bankruptcy
proceedings, meeting participants said.

The amount of the expansion to support the cash-strapped carrier's financing
for the time being will be announced Sunday after further consultations, they
said.
The bank and the government are considering expanding the credit line to 200
billion yen, and the additional portion will not be guaranteed by the
government, sources familiar with the matter said.
The expansion was requested by the government in the meeting at a Tokyo hotel
attended by Deputy Prime Minister Naoto Kan, concurrently state minister for
national strategy, and transport minister Seiji Maehara, among other officials,
they said.
The meeting took place after Kan, Maehara and some other Cabinet ministers met
twice on Wednesday in the wake of media reports earlier this week that the
government-backed Enterprise Turnaround Initiative Corp. of Japan had proposed
bankruptcy proceedings as the sole option for bailing out the airline.
ETIC will decide on a financial package for the carrier in mid-January.
The reported proposal has aroused concerns about the airline's credibility on
the Tokyo stock market, sending its stock plunging to an all-time low of 60 yen
during Wednesday's trading.
The government is said to be split over how to rescue the carrier. Kan, who
oversees ETIC, and some other Cabinet ministers favor court-backed bankruptcy
protection, while Maehara, minister of land, infrastructure, transport and
tourism, opposes it for fear such a move would hinder JAL's operations.
==Kyodo
2009-12-31 20:59:02