JAL To Get Capital Injection - Report

February 25, 2011

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Struggling Japan Airlines will get capital of JPY¥10 billion - JPY¥20 billion (USD$122.1 million - USD$244.1 million) from eight firms, the Nikkei business daily reported.

The carrier, hoping to complete its court-led rehabilitation by the end of March and re-list by the end of 2012, is also turning to 12 banks for JPY¥280 billion in loans, Nikkei said.

JAL has been accelerating its turnaround efforts since receiving JPY¥350 billion from the government-backed Enterprise Turnaround Initiative Corporation of Japan in December, Nikkei said.

Sompo Japan Insurance, Aioi Nissay Dowa Insurance and Mitsui Sumitomo Insurance are possible lenders, Nikkei said.

The newspaper also said the airline intends to quickly repay about JPY¥320 billion in bankruptcy claims, and it will borrow JPY¥280 billion to do so.

Five lenders -- among them Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, and Sumitomo Mitsui Banking, as well as the Development Bank of Japan -- have already indicated their intention to provide funds, Nikkei said.

Another seven banks plan to provide loans to the airline, including Mitsubishi UFJ Trust, Aozora Bank and Chiba Bank.