I don't suppose Honma's suicide was related to this story, but I hope that Softbank is positioned to gain something by eating this type of immediate loss:
Issued: September 25 ,2000
Banks agree to Hazama bailout
General contractor wins cooperation in waiver, set to sell prime sites
Nippon Credit Bank has agreed to waive 6.1 billion yen in loans to Hazama Corp., a troubled general contractor now in the midst of restructuring, informed sources said.
The bank, which was recently sold by the government to a group led by Softbank Corp., will maintain at current levels the balance of its outstanding loans to Hazama over the next five years.
At the same time, Shinsei Bank, which also recently emerged from a period of temporary nationalization, has decided to abandon 15.3 billion yen in loans to Hazama.
Hazama has asked four creditors to forgive a total 105 billion yen in outstanding loans as part of a restructuring program. The contractor also plans to sell two sites in Tokyo's Nishi-Shinjuku district with a combined book value of 14.6 billion yen and another tract in Minami-Aoyama valued at 28.2 billion yen.
The company acquired the prime locations during the bubble economy years, but never built on them. It will sell the Nishi-Shinjuku land to a real-estate affiliate for 1.6 billion yen, and the Minami-Aoyama plot to Sekisui House Ltd. for 6 billion yen. Hazama will take an extraordinary loss of 35.2 billion yen on the sales.
Shinsei will sell the rest of its loans with book value of 27.7 billion yen to Dai-Ichi Kangyo Bank and Mitsubishi Trust & Banking Corp., Hazama's main banks.
Nippon Credit has decided to fix the balance of its lending over five years - the period of Hazama's restructuring plan - partly because it believes the reorganization will work.
Nippon Credit and Shinsei will not enforce a clause in their agreements with the government that allows them to sell back to the government loans whose value has fallen 20% or more, the sources said.
Dai-Ichi Kangyo Bank is set to abandon 48.9 billion yen in loans to Hazama, while Mitsubishi Trust & Banking will forgive 34.6 billion yen. |
