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Saturday, Oct. 25, 2003
Daiei decides against IRCJ rehab request
By TOMOKO OTAKE
Struggling supermarket chain Daiei Inc. has decided against seeking the help of the state-backed Industrial Revitalization Corp. of Japan following a disagreement with IRCJ officials over the sale of its assets, it was learned Friday.
Daiei President Kunio Takagi and the chain's creditors conveyed their decision in a meeting Friday with IRCJ President Atsushi Saito and Shinjiro Takagi, chairman of the decision-making Industrial Revitalization Committee, sources said.
The IRCJ had offered to bail Daiei out on condition that the retailer hand over the control of all of its so-called "Fukuoka operations" -- the Fukuoka Daiei Hawks professional baseball team, Fukuoka Dome and the Sea Hawks Hotel.
But Daiei wanted to retain its control over the baseball team, according to the sources.
The fate of Daiei, labeled a "zombie" firm by market watchers, has been closely monitored as the retailer's failure would mean massive job losses and would threaten the finances of major creditor banks, which have thrown money at the chain in the past.
Daiei's interest bearing debts stand at 1.19 trillion yen.
Daiei is reportedly in negotiations with U.S. investment firm Colony Capital LLC over the sale of the hotel and ballpark business.
Takagi has voiced hope that a basic agreement will be reached in November.
Meanwhile, the IRCJ announced Friday that it has decided to bail out local department store operator Tsu Matsubishi Co.
This brings to seven the number of companies to be bailed out by the organization.
Tsu Matsubishi, based in Tsu, Mie Prefecture, posted a net loss of 121 million yen in the business year that ended in February.
The company also has outstanding debts of 9.56 billion yen, officials said.