Asia

Alarmed by the amount of government involvement in Japan Airlines Corp.'s restructuring, the president of rival All Nippon Airways Co. ratcheted up warnings Wednesday that the state-supported overhaul could undermine competition in the airline industry, The Wall Street Journal reported. ANA President and Chief Executive Shinichiro Ito said his greatest concern is that fierce price competition could break out once JAL receives a government-backed lifeline of $10 billion to support its ailing operations. Mr.
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Chinese regulators have told some banks to temporarily halt lending amid growing fears of asset bubbles and inflation. The renewed efforts to rein in credit growth follow a burst of frantic lending activity by Chinese banks that have raised concerns about overheating in the Chinese economy. In the first two weeks of January alone, banks extended as much as Rmb1,100bn ($161bn) in new loans, analysts and bankers told the Financial Times. If banks were to sustain that pace of lending, they would pump nearly Rmb30,000bn into the economy this year.
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Premier Wen Jiabao signaled that Beijing is closely considering the risks associated with its stimulus policies in comments to the State Council posted on the central government's Web site Tuesday, The Wall Street Journal reported. China will maintain "reasonable and ample" money and credit supply in the first quarter, he said.
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Japan Airlines Corp.'s stint under bankruptcy protection isn't likely to be short or simple, The Wall Street Journal reported. The carrier, known as JAL, faces massive liabilities and has a sprawling business that covers everything from jet-fuel procurement to aircraft leasing, both in Japan and overseas. The case could also raise challenging questions about whether bankruptcy protection will be recognized as it does business in other countries. JAL said Tuesday it expects its international operations to continue as normal, though some detail may need to be sorted out.
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The two core units of Japan Airlines Corp in charge of operating flights and procuring funds will file for bankruptcy protection along their parent, the Nikkei newspaper reported on Friday. Japan Airlines Corp, Asia's largest airline by revenues, will file for bankruptcy protection as early as Tuesday as part of a restructuring package being crafted by a state-backed turnaround fund, sources have told Reuters.
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Japan Airlines moved a step closer to bankruptcy Friday by drawing down $1.6 billion in emergency funding, and the nation’s transport minister said the government would decide Tuesday on a state-led restructuring plan for the troubled carrier, The New York Times reported. JAL, the largest airline in Asia by revenue, has seen its market value collapse as probability has increased that it will file for bankruptcy protection. “We are doing everything possible to reduce anxiety,” said Seiji Maehara, the transport minister.
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The ongoing restructuring of Japan Airlines has landed legal advisory roles for Steptoe & Johnson, Hogan & Hartson, Jones Day, and two of Japan’s leading law firms, The AmLaw Daily reported. Eiji Katayama, a name partner at Japanese firm Abe, Ikubo & Katayama in Tokyo, is advising ETIC on JAL’s restructuring efforts. Under Japanese bankruptcy law, Katayama will likely be appointed trustee for JAL, where he would perform most of the duties traditionally reserved for debtors’ counsel in the U.S.
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A Japan Airlines Corp bankruptcy will have a wide-spread impact on small businesses that account for half of the nearly 3,000 Japanese companies that do business directly with the carrier, a research firm said. Tokyo Shoko Research said small firms with less than 1 billion yen ($10 million) in sales make up half of JAL's major business partners, supplying goods to or buying from JAL's 91 group firms. "It's highly likely these small companies will feel the pinch because they depend heavily on business with JAL," said Kazufumi Masuda, a researcher at Tokyo Shoko, which tracks bankruptcy data.
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China's pullback from stimulus efforts, which were geared toward grappling with the financial distress, is likely to affect Korea in deciding when to employ its own exit strategy, The Korea Times reported. China, Korea's largest trading partner, began to withdraw its expansionary policies this week with its central bank raising lenders' reserve requirement ratio by 50 basis points.
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Germany's Blue Wings is looking for funds following a dispute with shareholder Alexander Lebedev, as financial problems led regulators to ban the Duesseldorf-based airline from flying, Reuters reported. The carrier halted flights earlier on Wednesday, mere hours before German aviation authorities revoked its operating license for the time being, according to a spokesman for the company. Blue Wings' financial woes, which have left its staff without pay since mid-November, stem from a lack of financing from shareholders, the spokesman said.
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