M&A

23 November, 2009

REFILE-UPDATE 1-JAL slides to record low on bankruptcy jitters

* Stock falls as much as 9.5 pct to record low of 86 yen

* Follows pension cut requests, news Mitsui sold shares

* Slide reflects worries JAL could go bankrupt-analyst (Refiles to fix typo in headline)

TOKYO, Nov 24 (Reuters) - Shares of Japan Airlines Corp (9205.T) fell as much as 9.5 percent to a record low on investor worries the struggling airline could face bankruptcy if it cannot secure an agreement from its pensioners for benefit cuts.

JAL, Asia's largest airline by revenue, asked retirees and employees on Monday to accept an average 40 percent cut to their pension payouts and warned a failure to agree on cuts could push it to a court-led restructuring. [ID:nT300174]

The stock price slide also follows news that Mitsui & Co (8031.T) had sold its entire stake of 11.73 million shares in JAL during the six months to Sept. 30. A spokesman for the trading house did not say why it unloaded its shares, less than half of one percent of the company.

JAL shares were down 7.4 percent at 88 yen after falling as low as 86 yen, their lowest since a relisting in 2002.

The stock has lost more than half its value this year and is down 14 percent since the close on Nov. 17 after Transport Minister Seiji Maehara rattled investors by saying bankruptcy was still a possibility. [ID:nT199640]

"Maehara has said that bankruptcy is not entirely ruled out, and many retirees appear to disagree with the pension cuts," said Takashi Ushio, head of investment strategy division, Marusan Securities.

No one at JAL was immediately available for comment. ($1=88.90 Yen) (Reporting by Nathan Layne and Elaine Lies; Editing by Lincoln Feast) ((nathan.layne@thomsonreuters.com; +813-6441-1801; Reuters Messaging: nathan.layne.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

Source: http://www.reuters.com