Asia Pacific

The government-backed body drawing up a proposal to restructure Japan Airlines Corp. hopes to bring in an outsider with no aviation experience as a successor to current Chief Executive Haruka Nishimatsu, according to a person familiar with the matter, The Wall Street Journal reported. If successful, the move would mark the first time that JAL would be headed by an outsider with no aviation experience, underlining the severe degree of change facing the cash-strapped carrier. The Enterprise Turnaround Initiative Corp.

The run-up to New Year is a time to tidy up loose ends in Japan so that in January everything starts afresh. For a fleeting moment, it looked as if the government was doing just that when, after months of indecisiveness, it hinted on December 30th that Japan Airlines might be headed for bankruptcy, The Economist reported in a commentary. But after the shares slumped by 24% to an all-time low on the same day, ministers lost their nerve over sanctioning what could be one of Japan’s biggest corporate failures.

Japanese authorities have thrown a lifeline to the crisis-struck Japan Airlines (JAL), the largest carrier in Asia, by doubling a state-sponsored credit line to £1.33 billion, The Guardian reported. The government in Tokyo asked the Development Bank of Japan to double its existing 100 billion yen (£665 million) commitment facility to JAL today after ministers – including Seiji Maehara, transport minister, and Naoto Kan, deputy prime minister – met for crisis talks to discuss how Tokyo could further support the troubled carrier.

The Development Bank of Japan (DBJ) has agreed to increase the amount of its unsecured loans to Japan Airlines, which is under threat of bankruptcy, from 100 billion yen ($1.08 billion) currently, Japanese media reported on Thursday. Executives of the state-owned DBJ, Transport Minister Seiji Maehara and National Strategy Minister Naoto Kan met on Thursday to agree to raise the amount of loans as JAL has already used 55 billion yen of a 100 billion yen credit line recently extended by DBJ, Jiji news agency said.

Several cabinet members of the Japanese government want Japan Airlines Corp to withdraw completely from its international flights business and consolidate it with that of All Nippon Airways Co, the Mainichi Shimbun newspaper reported on Thursday, Reuters reported. The cabinet members met on Wednesday and appeared to have floated the idea in order to improve JAL's financial condition, Mainichi reported, without citing any sources. But Transport Minister Seiji Maehara was opposed to the plan of having only one international flight service airline from Japan, the newspaper said.

Some hedge funds are starting to wager on painful times ahead for Japan, the world's second-largest economy, The Wall Street Journal reported. These investors, including some who made successful bets against risky mortgages and financial companies in recent years, anticipate trouble for Japan's financial system. Their concern: Government borrowing continues to climb while demand for the nation's debt could taper off.

Aiful Corp.'s debt restructuring is a credit event and has triggered an auction of the credit default swaps written on the Japanese consumer credit firm's debt, a committee of dealers and investors ruled Wednesday, The Wall Street Journal reported. The Japan Determination Committee of the International Swaps and Derivatives Association, or ISDA, determined that a "restructuring credit event" had occurred, according to ISDA's Web site.

Shares in Japan Airlines plunged to a record low today amid rumours that Asia's biggest carrier could file for bankruptcy in an attempt to turn around its failing business, the Guardian reported. The transport minister, Seiji Maehara, and other cabinet ministers were this evening holding crisis talks to discuss JAL's options ahead of an official decision on the airline's future late next month.

Bankruptcy has been proposed by a state-backed fund as an option in the restructuring of Japan Airlines Corp., two sources familiar with the matter said, Reuters reported. The state-backed Enterprise Turnaround Initiative Corp of Japan (ETIC) has been holding talks with creditor banks on how to revive JAL, and is expected to make a final decision on whether to support the struggling carrier next month.

Pakistan’s National Accountability Bureau (NAB) is said to be under “immense pressure” not to pursue cases of wilful default of bank loans because some leaders of opposition parties and a number of Pakistan People’s Party (PPP) stalwarts were among defaulters, sources told Dawn on Sunday. They alleged that the NAB had put off a meeting scheduled for Wednesday to review default cases because of “government pressure”. Top NAB officials may meet later this week to decide how to deal with the cases of wilful default in the light of new government instructions.