Japan's Skymark submits bankruptcy plan despite creditor opposition

By Reuters

May 30, 2015 06:48 AM EDT

Japan's failed budget carrier Skymark Airlines Inc (SKALF.PK) submitted a restructuring plan for court approval on Friday despite opposition from the two main creditors owed about two-thirds of its roughly 300 billion yen ($2.4 billion) debt.

Skymark plans to enter discussions with creditors to seek to convince them to accept the restructuring plan, a lawyer for the airline told reporters at a news conference in the capital on Friday. The plan, submitted to Tokyo District Court, calls for major creditors to forgive 95 percent of Skymark's debt.

The two biggest creditors, European jet maker Airbus Group (AIR.PA) and aircraft leasing company Intrepid Aviation Ltd (INTR.N), have both threatened to block Japan's biggest airline, ANA Holdings (9202.T), from buying a 16.5 percent stake in Skymark, a feature of the restructuring plan.

"We will make utmost efforts through discussions" with Airbus and other creditors to secure acceptance for the revival plan, said Skymark lawyer Takeo Nakahara.

Airbus is opposing ANA's participation in a bid to persuade ANA to buy a number of Airbus jets, people familiar with the matter told Reuters this week.

Skymark ran into financial trouble after embarking on an ambitious expansion programme that included plans to fly A380 superjumbos on overseas routes. Unable to keep up with payments for the jets, Skymark opted for bankruptcy in January after Airbus scrapped the sale and demanded a $710 million cancellation fee.

ANA senior executive Toyoyuki Nagamine said on Friday the airline would not buy aircraft as a means to support Skymark. Appearing at the Skymark news conference, he said ANA believes it will maintain long-established friendly relations with Airbus.

An official at Airbus' office in Tokyo said no one was available to comment.

Intrepid's claims on Skymark total 115 billion yen and Airbus's 88 billion yen, the Skymark lawyer said.

Skymark has until July, when creditors are slated to meet to discuss revival plans, to persuade Airbus and Intrepid to drop their opposition to ANA's participation. Intrepid declined to comment.

By gaining a stake in Skymark, ANA would win access to more valuable landing rights at Tokyo's crowded Haneda airport. ANA already controls more than half of the landing slots at the capital's downtown airport, and adding more would bolster its lead over rival Japan Airlines Co (9201.T).

Under Skymark's plan, a fund formed by Sumitomo Mitsui Financial Group Inc (8316.T) and the Development Bank of Japan would take a combined 33.4 percent stake, while private equity firm Integral Corp maintains its 50.1 percent stake.

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