JAL files for bankruptcy reorganization

The action is the country's biggest non-financial corporate failure, the Times of London reported.

JAL stock, whose prices have been plunging in anticipation of the filing, sold off again Tuesday, trading at pennies a share.

JAL board decided to seek bankruptcy protection while it reorganizes under state supervision, Kyodo News reported.

The carrier is to continue flying with government funding guarantees to its creditors while being restructured which may take up to three years to complete and significantly shrink the carrier.

Currently, JAL has more than 13,000 business partners in Japan alone and operates flights to 35 countries and regions, Kyodo reported.

''The government will back up efforts to achieve (JAL's) revival while ensuring the continuation of stable and safe operations,'' Transport Minister Seiji Maehara said.

JAL's turnaround would be handled by the state-supported Enterprise Turnaround Initiative Corp. of Japan, which plans to invest 300 billion yen or about $3.3 billion in the carrier, Kyodo said.

"There will be a stigma attached to bankruptcy, but I think it is far better for JAL to fully revive itself and recover confidence'' through drastic court-led restructuring, Ryota Himeno, an analyst at Mitsubishi UFJ Securities Co., told Kyodo.

Copyright 2010 by United Press International.