Government Guarantee for $7.8 Billion of Loans, Pushing Japan Airlines (JALSY) shares up
December 07, 2009 5:13 AM
Japan Airlines Corp. (ADR) (OTC: JALSY) may get a government loan guarantee of as much as 700 billion yen ($7.8 billion). The guarantee will probably be included in the second extra budget for the current fiscal year.
According to Hirofumi Hirano, the government's chief spokesman, the state spending package may be released tomorrow. JALSY jumped the most in seven weeks in Tokyo trading as the guarantee may trim borrowing costs for the unprofitable airline. The carrier has sought government backing and financing from a state-affiliated fund to support restructuring plans after
posting losses in three of the past four years.
``The report on the government guarantee is helping to push up the shares,'' said Satoshi Yuzaki, a section manager at Takagi Securities in Tokyo. ``We're likely to see rapid swings in JAL's shares as short-term traders look to take profits.''
