Japan Airlines Corp., undergoing government-backed corporate rehabilitation, will seek to go public again by the end of 2012 under the recovery plan it must submit to the Tokyo District Court by Aug. 31, sources said Friday.
The plan also says JAL will cut its workforce by 37 percent by the end of fiscal 2014, compared with the end of fiscal 2008.
Through the public offering of its shares, JAL aims to repay ¥350 billion worth of capital that its rehabilitation administrator, Enterprise Turnaround Initiative Corp. of Japan, will inject into the airline, the sources said.
The airline believes that relisting should be done at an early date as a way to ensure the independence of its management and serve as a symbol of the rehabilitation, the sources said.
Some experts are saying JAL is slow in compiling its recovery plan, comparing the airline with U.S. auto giant General Motors Co., which earlier this month filed an application to relist its shares a year after delisting.
JAL was delisted in February after filing for bankruptcy protection in mid-January.
Major creditor banks are expected to formally approve the rehabilitation plan by Aug. 27, the sources said.
Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, and Sumitomo Mitsui Banking Corp., will rescind their earlier position of seeking the purchase by ETIC of remaining debt following the debt waiver.
With the concerned parties agreeing on the rehabilitation plan of JAL, negotiations will begin on the carrier’s request to the banks for fresh loans of about ¥320 billion.
“Even if we agreed on the rehabilitation plan, providing fresh loans is an entirely different issue,” a senior official of one of the banks said.
The sources said 31 banks, including the governmental Development Bank of Japan, will waive ¥383 billion in loans to JAL. If corporate bonds and financial products are included, the requested debt waiver totals ¥521.5 billion.
Japan’s former flag carrier has been stepping up efforts to come up with turnaround measures, including cutting personnel and unprofitable routes.
JAL is in the midst of restructuring to return to profitability by cutting costs. It will cut 19,133 jobs, or 37 percent, to 32,729 by March 2015 from the level in March 2009, according to the recovery plan.
Of the cut, 8,339 will come from an early retirement plan with monetary incentives.
The plan includes purchasing 65 energy-efficient airplanes, reducing flights from and to Kansai and Chubu international airports and selling subsidiaries engaged in various businesses at airports in Japan.
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