| NEWS ARCHIVES |
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| JAL may be bailed out by government |
| 19 Oct 2009 |
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Japan's new centre-left government is reportedly set to bail out troubled Japan Airlines (JAL).
The government may be stepping in after creditor banks rejected a restructuring plan submitted by the carrier.
A task force of corporate rescue experts overseen by Transport Minister Seiji Maehara wants a new quasi-public agency to take a majority stake in JAL.
The task force had wanted creditor banks to forgive debts of more than 250 billion yen or about 2.75 billion US dollars racked up by JAL.
But the banks say that would be too big a burden for them to carry, though they do not want to force JAL into bankruptcy.
JAL's fate could thus be decided by the Enterprise Turnaround Initiative Corp of Japan.
The new agency was launched on Friday to help debt-laden companies that are seen as having the potential to recover.
Since taking office last month, the centre-left Democratic Party has made clear that JAL must do more to restructure before it receives any public funds.
The airline was initially offering to cut 6,800 jobs, drastically reduce its route network and seek a tie-up with a foreign carrier.
Under government pressure, JAL is now said to be ready to shed 9,000 jobs and oust its president, Haruka Nishimatsu. |