Mitsubishi Corporation (MC) today announced losses relating to the January 19, 2010 filing by Japan Airlines Corporation (JAL) and two affiliated companies with the Tokyo District Court for the commencement of corporate reorganization proceedings. Details are as follows.

 

Mitsubishi Corporation will book write-offs of and losses on sale of approximately 0.7 billion yen and approximately 15.0 billion yen in the fiscal year ending March 31, 2010 relating to JAL ordinary shares (carrying amount: approximately 0.7 billion yen) and Class A shares (preferred shares; carrying amount: approximately 15.0 billion yen).

 

Specifically, MC recorded write-offs of marketable securities available for sale in relation to ordinary shares and Class A shares (preferred shares) of approximately 0.5 billion yen and approximately 15.0 billion yen, respectively, in the third quarter ended December 31, 2009. Furthermore, MC will record losses on sale of ordinary shares of approximately 0.2 billion yen in the fourth quarter of the current fiscal year; MC had sold all its JAL shares as of January 18, 2010.

 

MC’s UK subsidiary Petro-Diamond Risk Management Ltd. (PDRM) will record losses totaling approximately 23.9 billion yen in the fiscal year ending March 31, 2010 following cancellation of existing derivative contracts relating to jet fuel hedging transactions for Japan Airlines International Co., Ltd. because that company has entered corporate reorganization proceedings. Specifically, PDRM booked losses of approximately 0.8 billion yen in the first six months of the current fiscal year, and approximately 19.4 billion yen in the third quarter, and will book additional losses of approximately 3.7 billion yen in the fourth quarter.

 

In accordance with the above treatment, MC will record write-offs of marketable securities for PDRM shares held by MC as well as book provisions for the negative equity of PDRM on a non-consolidated basis. MC will record losses totaling approximately 20.4 billion yen in the fiscal year ending March 31, 2010: approximately 16.9 billion yen in the third quarter and approximately 3.5 billion yen in the fourth quarter.

 

Headquarters: Mid City Place, 71 High Holborn, London WC1V6BA, United Kingdom

Representative: Hideki Nakagawa, Chairman and CEO

Business: Energy commodity related risk management

Capital: 3.6 billion yen

 

MC will record write-offs of marketable securities available for sale of approximately 0.05 billion yen and losses on sale of shares of approximately 0.02 billion yen in the third and fourth quarters of the fiscal year ending March 31, 2010, respectively, on ordinary shares (with a carrying amount of approximately 0.07 billion yen) of JAL held by MC subsidiary Meidi-ya Corporation. All of these JAL shares had been sold as of January 14, 2010.

 

The impact of the abovementioned write-offs and losses has been fully incorporated in the consolidated net income forecast issued today for the fiscal year ending March 31, 2010; there was no change to the previous forecast.