Japan Airlines (JAL) is set to file for bankruptcy on Jan. 19, the first step in a court-led rehabilitation process for the debt-ridden Japanese carrier, news reports said yesterday.
The decision came as its creditor banks dropped their earlier proposal for an out-of-court reorganization of the troubled airline after ensuring public support, the Nikkei Shimbun business daily and other media reported.
The state-backed Enterprise Turnaround Initiative Corp, now overseeing JAL’s restructuring, will provide ¥300 billion (US$3.2 billion) in investment so it can continue operations, the news reports said.
The government body will also ask JAL’s creditors to waive a further ¥350 billion in loans to the airline, while speeding up its restructuring, including massive trimming of its international routes, they said.
“We have made an effort to minimize troubles with JAL’s operations and will continue to do so in the future,” Japanese Prime Minister Yukio Hatoyama said late on Friday after meeting transport minister Seiji Maehara.
The government will issue a statement to 35 countries, where JAL has operations, guaranteeing public support in a bid to help avoid a possible credit squeeze on the company overseas, the Yomiuri Shimbun said.
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