Japan Airlines to Raise 100-150 Billion Yen

Japan Airlines will seek a capital infusion of 100-150 billion yen ($880 million-$1.32 billion) from major creditors and business parters, likely through issuance of preferred shares, the Nikkei business daily reported on Friday.

The report sent its shares down more than 5 percent by late trade.

The carrier is also considering spinning off its air cargo business and asking other firms to buys stakes in it, likely up to nearly 50 percent, the Nikkei said.

In a statement, JAL said nothing has been decided on a capital boost or business reorganisation.

The struggling carrier has been looking for ways to boost its capital.

Earlier this year, sources told Reuters that JAL had asked its major lenders to swap part of its 1.7 trillion yen ($15 billion) of debt for equity, which has not materialised.

This time, the paper said, the airline is expected to seek a capital infusion from trading houses Mitsubishi Corp and Mitsui & Co, as well as its four main lenders -- the Development Bank of Japan, Mizuho Corporate Bank, Bank of Tokyo Mitsubishi UFJ, and Sumitomo Mitsui Banking Corp.

Mizuho, Tokyo-Mitsubishi UFJ and Sumitomo Mitsui are units of Mizuho Financial Group, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial Group respectively.

JAL hopes to reach agreement by the end of the business year to next March 31, the Nikkei said.

JAL shares ended Friday, the last trading day of the year, down 5.6 percent at 255 yen, underperforming a 1.7 percent fall of the benchmark Nikkei average.