TOKYO: The Development Bank of Japan and Sumitomo Mitsui Banking Corp. are in the final stages of negotiations to purchase a combined 33.4 percent stake in the rehabilitation of bankrupt Skymark Airlines Inc., sources familiar with the matter said Tuesday. With a combined stake of over one-third, the governmental bank and Sumitomo Mitsui will be able to secure voting power to veto management decisions if necessary.
ANA Holdings Inc., parent of Japan’s biggest airline All Nippon Airways Co., is expected to take 16.5 percent, the sources said. Skymark said last month that ANA Holdings would take up to 19.9 percent.ANA Holdings will refrain from obtaining the maximum stake to reduce the public image that it will have a strong influence on Skymark’s management, the sources said.
Skymark filed for court protection in January, faced with tough competition from rising low-cost carriers such as Peach Aviation Ltd. and Jetstar Japan Co., affiliates of ANA and Japan Airlines Co., respectively. Skymark was delisted from the Tokyo Stock Exchange in March.
The failed carrier is scheduled to submit a revamp plan to the Tokyo District Court by May 29 that will include investments totaling some ¥18 billion it outlined in late April.Under the plan, Tokyo-based investment fund Integral Corp. agreed to hold a 50.1 percent stake in the restructured airline.
The plan also requires Skymark to establish new management, with ANA set to appoint its new president and Integral its new chairman, replacing the current president, Masakazu Arimori, and chairman, Takashi Ide. Integral will be entitled to appoint three of the Skymark board’s six members, including chairman.
Skymark will implement a 100 percent capital reduction and then issue new stocks to Integral, ANA and other possible sponsors after its restructuring plan is approved by the court and its creditors, the sources said.Integral and ANA have said they will have Skymark decide on routes, the number of flights and fares at its own discretion for the time being to give it independence as demanded. The troubled airline has said it is not planning any job cuts.
An executive at ANA said last month that his company is seeking to support Skymark by providing its know-how in maintaining safe flight operations and starting code-sharing flights.The major airline has a track record of restoring struggling Japanese regional airlines, such as Hokkaido International Airlines Co.
