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State-owned bank to provide JAL Y100 bln-sources

Tue Nov 10, 2009 9:21pm EST

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TOKYO, Nov 11 (Reuters) - The state-owned Development of Japan will offer a 100 billion yen ($1.1 billion) line of credit to Japan Airlines Corp (9205.T) to keep the airline from running out of cash, two sources familiar with the matter said.

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At the same time units of Mitsubishi UFJ Financial Group (8306.T), Mizuho Financial Group (8411.T) and Sumitomo Mitsui Financial Group (8316.T) will provide a total of 25 billion yen in loans to purchase aircraft, the sources said.

The 25 billion yen loan from private banks will be backed by the Japan Bank for International Cooperation, the sources said.

The loans are part of a government rescue package for the airline ahead of its first-half earnings announcement on Nov. 13.

Japan's government announced on Tuesday that it would use loans from the Development Bank of Japan to keep JAL in operation while it awaits a possible capital infusion from a state-backed turnaround fund. [ID:nT287070]

The government had not given details on the size of that loan or the role of JAL's private creditors in supporting the airline. ($1=89.75 Yen) (Reporting by Nobuhiro Kubo and Taro Fuse)

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