Reports: Daiei to Announce Overhaul
TOKYO (AP) _ Japan’s largest retailer, Daiei Inc., plans to unveil a three-year restructuring plan that would eliminate half of the ailing company’s 150 subsidiaries and close unprofitable stores, several major newspapers reported Friday.
Daiei will also announce on Friday an agreement with its creditors _ led by UFJ Bank, Sumitomo Mitsui Banking Corp. and Fuji Bank _ for a 420 billion yen ($3.18 billion) credit lifeline that will help the retailer stave off bankruptcy, the Nihon Keizai financial daily newspaper reported.
Burdened with an estimated 2.3 trillion yen ($17.4 billion) in interest-bearing debt, Daiei has been shuttering money-losing stores nationwide and eliminating jobs in recent months as it struggles to revive its supermarket business.
The new plan calls for the sale or liquidation of hotels, restaurants and a discount store chain, and the reduction by half of the company’s 150 subsidiaries, the Nihon Keizai said. It didn’t mention any planned job cuts.
The company will continue to own the Fukuoka Daiei Hawks baseball club but plans to sell the club’s home stadium, Fukuoka Dome, in a securitization deal, the report said. It will also sell its stake in publicly listed builder Ichiken Co., the report said.
Daiei’s president, Kunio Takagi, will keep his post, it said.
Under the credit package, the three banks agreed to retire preferred shares worth 120 billion yen ($909 million) they purchased from Daiei last year, the mass-circulation Mainichi newspaper said. They also agreed to a 300 billion yen ($2.3 billion) debt waiver and debt-equity swap, the Mainichi reported.
Japanese retailers, hard hit by the country’s decade-long economic slump, have seen their profits evaporate as wary consumers have cut back on spending and unemployment has reached new record highs.