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January 11, 2008 |
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JAPAN AIRLINES: To Ask JPY60 Billion More From Creditors Japan Airlines International Co. Ltd. plans to ask for a capital injection totaling about JPY60 billion from its four major bank creditors as part of its JPY150-billion capital increase plan, sources familiar with the matter revealed to Kyodo News. Kyodo News' sources say that the four banks are the Development Bank of Japan, Mizuho Corporate Bank, the Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp. Jiji Press reports JAL will raise the JPY60 billion through some issuance of preferred shares to its creditors. According to Jiji Press, JAL will ask investment worth JPY20 billion each from Development Bank of Japan and Mizuho Corporate Bank, JPY18 billion from Mitsubishi UFJ Financial Group and JPY5 billion from Sumitomo Mitsui Financial Group Inc. Jiji Press further reports that JAL plans to raise some JPY90 billion through the issuance of preferred shares to business partners, mainly trading houses. The amount is part of JAL's plan to issue a total of JPY150 billion-worth of preferred shares by the end of the fiscal year as part of its business turnaround measures. Of the JPY90-billion portion, JAL plans to seek JPY20 billion each from major traders Mitsui & Co., Mitsubishi Corp. and Sojitz Corp., JPY10 billion each from Itochu Corp. and Marubeni Corp., and JPY5 billion from Japan Energy Corp, relates Jiji Press. JAL procures aircraft and related parts through the traders, and buys aircraft fuel from Japan Energy, notes Jiji Press. Tokyo-based Japan Airlines International Company, Limited -- http://www.jal.com/en/ -- was created as a result of the merger of Japan Airlines and Japan Air Systems to boost domestic coverage. Japan Airlines flies to the United States, Brazil and France. * * * As reported on Feb. 9, 2007, that Standard & Poor's Ratings Services affirmed its 'B+' long-term corporate credit and issue ratings on Japan Airlines Corp. (B+/Negative/--) following the company's announcement of its new medium-term management plan. The outlook on the long-term corporate credit rating is negative. As reported on Oct. 10, 2006, that Moody's Investors Service affirmed its Ba3 long-term debt ratings and issuer ratings for both Japan Airlines International Co., Ltd and Japan Airlines Domestic Co., Ltd. The rating affirmation is in response to the planned restructuring of the Japan Airlines Corporation group on Oct. 1, 2006 with the completion of the merger of JAL's two operating subsidiaries, JAL International and Japan Airlines Domestic. JAL International will be the surviving company. The rating outlook is stable. Fitch Ratings Tokyo analyst Satoru Aoyama said that the company's debt obligations and expenses for new aircraft have placed it in an unfavorable financial position. Fitch assigned a BB- rating on the company, which is three notches lower than investment grade. |
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