Skymark’s blueprint leaves many problems unresolved

The Yomiuri Shimbun/Asia News Network

The blueprint of its corporate reconstruction has been presented, but it is still uncertain whether the planned rehabilitation will succeed or not. Skymark Airlines, the third-largest domestic airline despite its collapse in January, has submitted a draft of its rehabilitation plan to the Tokyo District Court. Under the plan, Skymark will retire all outstanding shares and allocate new shares worth 18 billion yen to a third party, with 15.5 billion yen of the new capital to be used to repay debts. Following the capital increase, the Integral Corp. investment fund will hold an equity stake of 50.1 percent, while ANA Holdings, the parent of All Nippon Airways, will hold 16.5 percent. Together with a syndicate of banks, which are aligned with the ANA group, the ANA camp will have an equity stake of 49.9 percent. If the plan wins approval at a meeting of creditors, scheduled to be held in July, Skymark reportedly aims to get relisted within five years. An airline company is an important pillar of public transportation. Flight safety is most important for an airline, not to mention a stable corporate management. Participation of ANA, a leading airline, in Skymark’s corporate turnaround is realistic. Yet in the process of drawing up the rehabilitation plan, there was constant bickering between Integral and ANA, with the investment fund asserting that Skymark’s reconstruction would not necessarily require the support of an airline company. Although both sides compromised as the deadline for submitting the plan to the court approached, mutual mistrust remains apparent.