JAL may issue new shares to trading houses-paper

TOKYO, May 31 (Reuters) - Japan Airlines Corp. (JAL) (9205.T) is considering issuing 100-150 billion yen ($822 million-$1.23 billion) in new shares to trading houses including Sojitz Holdings Corp. (2768.T) and Mitsui & Co. (8031.T), the Yomiuri newspaper reported on Thursday.

Sources told Reuters last week that JAL had asked its main lenders to swap part of its 1.7 trillion yen of debt for equity to prop up its capital and help it restructure, in an aid request Japanese media has put as high as 400 billion yen.

The Yomiuri said JAL would likely issue non-voting preferred shares to the trading houses. Part of the funds would be used to procure more efficient aircraft to help it keep up with domestic rival All Nippon Airways Co. (ANA) (9202.T), the paper said.

In addition to Sojitz and Mitsui, JAL may also issue shares to Itochu Corp. (8001.T) and Mitsubishi Corp. (8058.T). JAL is looking to raise funds from trading houses with which it already has business ties, such as for the leasing of aircraft, the Yomiuri said.

JAL has already requested financial assistance from its lenders, the Development Bank of Japan, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.

The Yomiuri said aid from its lenders would likely exceed 200 billion yen, with the remainder to come from the capital raised from the trading houses. All told, the aid package could total from between 300 and 400 billion yen, it said.

JAL unveiled a business plan three months ago under which it vowed to reduce its interest-bearing debt by a third over the next four years through the sale of non-core assets. It also needs capital to slash 4,300 jobs out of a work force of 53,100.