Government doubles JAL credit line to $2.1 billion
04 Jan 2010
The Japanese government yesterday threw up a temporary lifeline to ailing Japan Airlines by doubling a state-backed loan to 200 billion yen ($2.1 billion).
The carrier's shares skyrocketed 22 yen, or 32.83 per cent, to 89 at 13.00 hrs on Monday, welcoming the government decision.
JAL shares had nose-dived on Wednesday, the final trading day of 2009, losing 23.9 per cent at 67 yen after local media reported that bankruptcy was a possibility for the beleaguered airline.
The government asked the Development Bank of Japan to raise its commitment facility to JAL after transport minister Seiji Maehara and deputy prime minister Naoto Kan met in Tokyo yesterday, easing fears of bankruptcy.
The DBJ, which is 100 per cent owned by the Japanese government, said it would consider the request and come to a decision as soon as possible "in order to co-operate with the safe operation" of the carrier.
The bank has extended a 100 billion yen credit line to JAL, of which 55 billion has already been used.
