* Kyocera founder Kazuo Inamori becoming new JAL CEO
* JAL stock down 81 pct or by daily limit of 30 yen
* $1.8 bln erased in 2 days, market cap now about $200 mln
* JAL may file for bankruptcy as early as Jan. 19-sources
* Bankruptcy will likely wipe out capital, cause delisting
(Adds Inamori comments, details)
By Mariko Katsumura and Kiyoshi Takenaka
TOKYO, Jan 13 Kazuo Inamori, the founder of
electronics maker Kyocera Corp (6971.T), agreed on Wednesday to
become the new chief executive of Japan Airlines 9205.T, as the
carrier's shares plunged ahead of its expected bankruptcy.
JAL is likely to file for bankruptcy as early as next week as
part of a broader restructuring aimed at reducing debts, slashing
about 13,000 jobs and cutting dozens of unprofitable routes,
sources have told Reuters. [ID:nTOE60A04W]
With $16 billion in debts, JAL's bankruptcy would be the
sixth largest in Japan's history.
Inamori, the 77-year-old honorary chairman of Kyocera and an
ordained Buddhist priest, will replace Haruka Nishimatsu, who has
indicated he would resign as part of the restructuring overseen
by a government-backed fund.
Founded in 1959 as a ceramics company, Kyocera has grown into
one of Japan's most profitable technology firms. Its products
include semiconductor components, mobile phones and solar cells.
"I don't know anything about the transportation industry, but
I would like to make my best contribution," Inamori told
reporters after meeting Prime Minister Yukio Hatoyama, adding
that he did not plan to take a salary.
"I am old and a full-time job is hard for me, so I would like
to work three or four days a week and I will work for free."
Lack of experience in the airline industry may initially
hinder Inamori's effort, but it would not be a critical drawback,
"I think he's a right person for Japan Airlines at this point
since Japan Airlines needs a respected person for its business
restructuring," said Yasuhiro Matsumoto, senior credit analyst at
"For the time being, the government has agreed to offer
financial support for Japan Airlines, so we should not worry
about how long it would take for him to become more familiar with
Dealing with the ailing airline is one of a long list of
problems confronting Hatoyama's government, which took power in
September after his Democratic Party trounced the long-ruling
conservative rival in an election.
Inamori is a staunch supporter of the Democrats and known to
have close ties with Ichiro Ozawa, the party's No.2 official. He
is also a member of a panel headed by Hatoyama seeking to cut
wasteful government spending.
For five facts on Inamori click [ID:nTOE60C01E]
JAL shares tumbled by their daily limit of 30 yen to 7 yen,
or less than 10 cents, leaving Asia's largest carrier by revenue
with a market value of $208 million, about the same as Tunisair
TAIR.TN and less than the cost of a Boeing 747-8 widebody
More than 820 million JAL shares changed hands, accounting
for one-fourth of all volume on the Tokyo exchange.
The Enterprise Turnaround Initiative Corp of Japan (ETIC),
the state-backed fund, plans to put about 300 billion yen ($3.3
billion) in fresh capital into JAL, provided it file for
bankruptcy and its banks forgive about 350 billion yen in debts,
sources have said.
Normally a bankruptcy would lead to a delisting and render
"It is highly probable that JAL will have its capital wiped
out when it files for bankruptcy," said Shinsei's Matsumoto.
Debt holders will also suffer. JAL has 67.2 billion yen in
outstanding bonds, only about 20 percent of which will likely be
recoverable in a court-led restructuring, according to an
estimate by UBS Securities.
The ETIC said in a statement that in the support plan under
consideration it would take measures to ensure JAL can maintain
its operations, including securing funding so it can continue to
pay for fuel, aircraft leases and other commerical debts.
Besides being an entrepreneur, incoming CEO Inamori has a
track record as a corporate turnaround specialist.
A decade ago, Kyocera made failed office equipment maker Mita
Industrial its wholly owned subsidiary and helped its recovery.
The entity now is a profit-making operation, with more than 200
billion yen in annual sales.
But analysts said turning JAL around would not be easy.
"JAL has been encumbered to serve 108 airports, when there is
no economic justification for some of the airports in the first
place. As a regulator, you're not going to tell them no," said
Lance Gatling, president of Nexial Research, a consultancy.
"The question is whether any management can come in and undo
any of these traditional relationships," he said.
(Additional reporting by Dan Sloan, Nathan Layne, Taiga
Uranaka, Hideyuki Sano, Junko Fujita; Editing by David Dolan and