- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:57 06:11 12:09 15:28 18:01 19:15
A state-backed turnaround fund is considering putting about 300 billion yen ($3.2 billion) in fresh capital into JAL, provided it files for bankruptcy and creditors agree to waive debt, sources told Reuters earlier this week.
JAL's main creditors, which include Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group, had countered with a proposal to restructure JAL without a bankruptcy filing.
But with the state-backed Enterprise Turnaround Initiative Corp of Japan (ETIC) holding firm that bankruptcy is the most transparent and orderly way to deal with JAL's problems, the banks will almost certainly agree to the plan, sources said.
"JAL needs 300 billion yen and the ETIC is the only one that can provide it. If the ETIC is pushing for a court-led restructuring then we have to accept it. Otherwise JAL will collapse," said one of the sources, who has direct knowledge of the discussions between the banks, the government and the ETIC.
The ETIC is planning to set up a credit line of more than 600 billion yen in coordination with the state-owned Development Bank of Japan to ensure JAL has enough funds to keep operating once it files for bankruptcy, a fourth source with knowledge of that plan told Reuters.
The ETIC is eyeing some time between January 19 to 22 for JAL to file for bankruptcy and for the ETIC to officially announce its plan to support the carrier, sources have said.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.
Follow Emirates 24|7 on Google News.