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JAL agrees to bank terms to pay back new lending in two years

2-Nov-2010 10:11 AM

Japan Airlines Corp has reportedly reached a basic agreement with its main lenders to repay the JPY320 billion (USD3.97 billion) that it is set to receive in Mar-2011 in two years (The Nikkei, 02-Nov-2010). The Development Bank of Japan, Mizuho Corporate Bank and the three other banks had strongly objected to JAL's proposal to pay back the loans in seven years and instead requested the loans be paid by Jan-2013 when the government-backed Enterprise Turnaround Initiative Corp of Japan (ETIC) will end its support for the carrier's restructuring. The carrier, which will use the funds to pay back existing lending and other obligations, is expected to enter into negotiations to refinance the lending before the deadline. JAL Chairman Kazuo Inamori is reportedly expected to meet top executives at each of the banks from this week to ask for a resumption of lending and for the banks to take stakes in the airline.