TOKYO: Shares in Japanese budget airline Skymark plunged on Thursday after a report said talks about a capital injection deal with bigger rival All Nippon Airways (ANA) had collapsed.
The company's Tokyo-listed shares dropped as much as 15.38 percent in early trading before recovering some losses to close 6.92 percent lower at 363.0 yen ($3).
Investors were spooked by a report in the Asahi newspaper that said a possible agreement over ANA investing in Skymark had fallen apart, and that the money-losing carrier would try to climb out of the red on its own.
Skymark, which flies domestic routes in Japan, rejected the report.
"It is not true that we requested a capital injection (from ANA) and we don't plan to do so," a company spokeswoman said.
But she added that the firm was talking to ANA and rival Japan Airlines about code-sharing, as well as domestic and overseas funds for a possible investment deal.
"We are working to reach a deal as soon as possible," but nothing concrete had been decided, the spokeswoman said, referring to code-sharing.
The top-selling Yomiuri newspaper said ANA and JAL planned to start code-sharing with Skymark in late March. Responding to that report, the airlines said a timeline and other details had not yet been decided.
In a separate story, the leading Nikkei business daily said Skymark had reached a "broad agreement" on code-sharing with its rivals to start in the spring.
Later Thursday Skymark issued a statement that denied the Nikkei story, and said it was postponing a February 18 meeting where it had been expected to seek shareholder approval for any new investment.
It cited a delay in fixing the meeting's agenda.
The carrier has been struggling owing to fierce competition in the airline industry and its woes deepened in July when Airbus cancelled a deal for the carrier to buy six A380 jets, apparently over payment concerns, sending its shares into freefall.
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