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Skymark to give court rehab plan as talks continue with creditors

TOKYO -- Skymark Airlines will submit its rehabilitation proposal to Tokyo District Court as planned Friday, even without the support of two key creditors.

     The budget airline likely will welcome Masahiko Ichie, managing executive officer of the Development Bank of Japan, as its new president. Nobuo Sayama, a representative director of main turnaround sponsor Integral, is expected to be the new chairman.

     Ichie, known as a pioneer of corporate investment at the DBJ, has experience assisting the turnaround of supermarket operator Daiei. He and Sayama both would be representative directors of Skymark.

     Integral will nominate three directors, while ANA Holdings -- the parent of airline All Nippon Airways -- the DBJ and Sumitomo Mitsui Banking Corp. also will nominate a total of three. Current board members including President Masakazu Arimori and Chairman Takashi Ide will step down.

     If the plan is approved, Skymark will reduce its capital by 100% and will be recapitalized, with Integral taking a 50.1% stake and ANA holding 16.5%. The remaining 33.4% will be held by an investment fund to be created through evenly split between the DBJ and SMBC.

     About 15 billion yen ($120 million) to be raised in this process will be used to pay off about 5% of Skymark's 310 billion yen debt. If creditors agree to lower repayment obligations, that percentage would rise.

     Skymark also will announce code-sharing with ANA, with details such as routes yet to be sorted out.

     But two of Skymark's key creditors oppose these plans involving ANA. Skymark owes 104 billion yen to U.S. aircraft leasing company Intrepid Aviation and 85 billion yen to European aircraft builder Airbus, both of whom are unlikely to endorse the current rehabilitation plan.

     Skymark needs approval from at least half the creditors in terms of money owed. The two companies could block the plans at the creditors meeting planned for around July, so negotiations with them will be key.


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