Japan Air stock plunges as investors fear bankruptcy!
TOKYO, Japan - December 30, 2009 - The airline's shares closed down 24% at 67 yen, adding to a loss of 8% on Tuesday, as markets in Tokyo considered the prospect of Japan Air heading into bankruptcy.
The global downturn has deepened Japan Air's exisiting woes, which have forced it to seek a bailout from the government three times since 2001. The airline, which was founded six years after the end of World War II, owes its lenders more than 500bn yen (£3.41bn) and racked up a loss of 62.3bn yen over the last financial year.
“Shareholders are becoming convinced that bankruptcy will be the case,” Mitsushige Akino, who manages the equivalent of $450m at Ichiyoshi Investment Management in Tokyo, told Bloomberg. “They are dumping the stock. JAL’s value will be zero if it goes bankrupt.”
Japan's transport minister, Seiji Maehara, told reporters in Tokyo on Wednesday that bankruptcy is not the only option for Japan Air, whose creditors include Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, Mizuho Financial and the state-affiliated Development Bank of Japan.
The country's cabinet is due to meet later today in Tokyo to discuss the airline's future. Mr. Maehara said that a plan to keep the airline flying would be annouced should it be required.
The global downturn has deepened Japan Air's exisiting woes, which have forced it to seek a bailout from the government three times since 2001. The airline, which was founded six years after the end of World War II, owes its lenders more than 500bn yen (£3.41bn) and racked up a loss of 62.3bn yen over the last financial year.
“Shareholders are becoming convinced that bankruptcy will be the case,” Mitsushige Akino, who manages the equivalent of $450m at Ichiyoshi Investment Management in Tokyo, told Bloomberg. “They are dumping the stock. JAL’s value will be zero if it goes bankrupt.”
Japan's transport minister, Seiji Maehara, told reporters in Tokyo on Wednesday that bankruptcy is not the only option for Japan Air, whose creditors include Mitsubishi UFJ Financial, Sumitomo Mitsui Financial, Mizuho Financial and the state-affiliated Development Bank of Japan.
The country's cabinet is due to meet later today in Tokyo to discuss the airline's future. Mr. Maehara said that a plan to keep the airline flying would be annouced should it be required.
