Business & Finance
Pacific Gas & Electric won pledges of $2.9 billion in loans and letters of credit to support the sale of new bonds - moving it a step closer to emerging from bankruptcy. But a news release issued Tuesday said the San Francisco company at the center of California's 2000-2001 energy crisis still needs an upgrade of its status to "investment grade" before it can complete the financing necessary to emerge from Chapter 11 protection.
Japan Airlines System, which operates the largest carrier in Asia, said it will cut 4,500 jobs over the next three years under a new business plan. Citing a slump in passenger traffic due to such factors as the SARS (severe acute respiratory syndrome) and bird flu outbreaks in the region, the company said it will end its fiscal year March 31 with a record $799 million loss. A year ago, it posted a profit of $104.4 million. When new hires become necessary - especially flight attendants - they will be on a part-time basis or among non-Japanese who will accept lower pay scales, it said.
Struggling Kanebo Ltd., a multinational maker of cosmetics, toiletries, and pharmaceuticals, will be bailed out by the government of Japan to the tune of $3.3 billion, reports said. In return for clearing half its debt off the books, the company will surrender control of 86 percent of its business. The rescue package, by the government's Industrial Revitalization Corp., is its largest to date, the reports said.
At least 400,000 people who owe money they can't repay will be bailed out by South Korea's government as part of a plan to jump-start the flagging economy, the financial news service Bloomberg.com reported. Another 200,000 debtors may be covered at a later date, it said. The move, announced by the Finance and Economy Ministry five weeks before elections for a new parliament, will cost an initial $425 million. It calls for creation of a new government collection agency to buy nonperforming loans from banks and other lenders. Debtors then will be offered new loans at lower interest rates, with an eight-year deadline for repayment. Last year ended with 19 South Korean banks holding a combined $15.9 billion in bad loans.