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Jan. 10 (Bloomberg) -- Japan Airlines Corp.’s largest banks are set to agree to a bankruptcy of Asia’s largest carrier, said four people familiar with the matter.

Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are prepared to go along with a proposed court-led reconstruction, said three people who declined to be identified because the matter is private. The state-owned Development Bank of Japan already agreed to the bankruptcy, according to the other person.

Japan Air is seeking new investors and loan write-offs as it restructures after posting three losses in four years. The government will hold talks on JAL’s future as soon as Jan. 12, Transport Minister Seiji Maehara told reporters two days ago in Tokyo after meeting with Prime Minister Yukio Hatoyama.

“JAL can be reborn as an attractive company should it undergo decisive restructuring,” said Ryota Himeno, an analyst at Mitsubishi UFJ Securities Co. “It’s a positive for JAL if the reports on bankruptcy are true.”

Mizuho spokeswoman Masako Shiono, Mitsubishi UFJ spokesman Takashi Takeuchi and JAL spokeswoman Sze Hunn Yap declined to comment. Sumitomo Mitsui spokeswoman Chika Togawa wasn’t immediately available for comment and calls to the media relations office of the Ministry of Finance, which oversees Development Bank, went unanswered outside regular office hours.

JAL’s Debt

JAL owed 429 billion yen ($4.6 billion) to its four largest creditors at the end of March, according to the company.

The Tokyo-based carrier will file for bankruptcy in the week starting Jan. 18, and the Enterprise Turnaround Initiative Corp. will agree to provide financial aid to Japan Air the same day, said a person familiar with the negotiations, who declined to be named.

The state-run fund may have JAL partner a U.S. airline on flights without any capital ties, the Nikkei newspaper reported today. Candidates for such an alliance include Delta Air Lines Inc. and AMR Corp.’s American Airlines, the report said.

Nikkei yesterday reported the banks would accept the government’s plan for a court-led bankruptcy.

JAL’s market capitalization tumbled below $2 billion last week, compared with more than $6 billion a year earlier. Its shares ended at 67 yen, matching the lowest close since the company listed in 2002.

The airline is suffering from tumbling international traffic and is trying to slash pension costs. JAL has asked its 9,000 retirees to accept cuts in their payouts of about 30 percent and set Jan. 12 as a deadline for responses.

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