DBJ 'to increase credit limit for Japan Airlines'

31 December 2009

The Development Bank of Japan (DBJ) is to increase the amount of credit that can be accessed by cash-strapped company Japan Airlines (JAL), according to reports.

DBJ, which is owned by the state, currently provides a $1 billion credit line to the airline but is reportedly willing to enlarge this in order to help the firm stave off fears of bankruptcy.

It is believed JAL has already used around $600 million in unsecured loans from the DBJ.

JAL's share price has fallen to a record low following an announcement last week by Japan's finance minister Hirohisa Fujii which stated that the government would not back any more loans to the airline.

However, it is believed that the share price plunge has prompted a policy rethink by ministers in the country.

The worries about the state of the company led the dollar to hit a two-month high against the yen on Wednesday (December 30th 2009).

By Asim Shah

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