Business

Skymark secures ¥50 billion in emergency financing to weather pandemic

Jiji

Skymark Airlines has secured up to ¥50 billion in financing to prepare for a second coronavirus crisis, it was learned Saturday.

Skymark has agreed with creditor banks to extend the repayment deadline for an outstanding ¥30 billion loan and establish a ¥20 billion credit line, informed sources said.

The funds are intended for use in employee wage and aircraft lease payments, according to the sources.

In May, Skymark used up its ¥30 billion credit line with Sumitomo Mitsui Banking Corp., Mizuho Bank and Resona Bank.

The company has recently agreed to repay the loan and borrow the same amount from the three banks and the Development Bank of Japan.

After the refinancing, the loan repayment deadline will be pushed back from November this year to July 2021.

In addition, Skymark agreed to set up a ¥20 billion credit line, boosting the total financial resources readily available to ¥50 billion.

Skymark passenger numbers in May plummeted 94.5 percent from the previous year after the government declared a state of emergency for the coronavirus. In June, passengers plunged 73.9 percent even after the emergency was lifted.

Skymark is expected to suffer a sizable loss in the year to March 2021. In April, the airline withdrew its listing application to the Tokyo Stock Exchange.

Bigger rivals ANA Holdings Inc. and Japan Airlines have also been working to secure funds to guard against prolonged weakness in travel demand.

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