JAL to file for bankruptcy protection

JAL to file for bankruptcy protection

JAL to file for bankruptcy protection

Xinhua news agency reported that JAL filed for bankruptcy protection with the Tokyo District Court, with its liabilities, including those of group firms totalling 2.32 trillion yen ($25.8 billion).
The Tokyo Stock Exchange said JAL shares will be delisted from its First Section from Feb 20 through 100 percent equity reduction.
The Japanese government said in a statement it will seek "the understanding and cooperation of foreign governments" to enable JAL to continue its flight operations and implement its rehabilitation programme.

The restructuring measures are being proposed by the state-backed Enterprise Turnaround Initiative Corp (ETIC). The airline applied for support from ETIC in October.

JAL, the former state-owned flag carrier, plans to cut 15,700 jobs, or one-third of its workforce, by the end of March 2013, and to sell or close down half the group's subsidiaries to 57 from 110 by March 2011, news reports said.

JAL's shares are to be delisted from the Tokyo Stock Exchange as it is to conduct a 100 per cent capital reduction, news reports said.

The airline would forgo jumbo jets and introduce energy-efficient aircraft instead, while scaling down the business. It would aim for group revenues of 1.36 trillion yen (nearly $15 billion) in the year through March 2013, down around 30 per cent from four years earlier, Kyodo News reported.

The plan calls for JAL's creditor banks to waive a total of 358.5 billion yen ($3.95 billion) in unsecured loans to the carrier. Of that amount, around 44 billion yen extended by the state-backed Development Bank of Japan will be shouldered by taxpayers, Kyodo said.

Meanwhile, the ETIC is to invest around 300 billion yen in the financially strapped carrier.