Kokusai Kogyo Co. plans to sell its equity stake in Imperial Hotel Ltd. and reduce unprofitable business operations as part of a revised rehabilitation plan being negotiated with its main creditor, the UFJ banking group, sources familiar with the move said Saturday.
Kokusai Kogyo, a Tokyo-based company that operates transportation, leisure and real estate businesses, is likely to sell all of its 39 percent interest in the hotel in an attempt to slash its interest-bearing debts of more than 300 billion yen.
Kokusai Kogyo is the largest shareholder of Imperial Hotel but is not closely involved in its management.
The UFJ group is expected to consider debt waivers and other forms of financial assistance worth tens of billions of yen, the sources said.
Kokusai Kogyo, founded by the late business tycoon Kenji Osano, saw its debts swell under its business expansion strategy.
Debt reduction is the company’s top priority. Kokusai Kogyo reported a net profit of 1.7 billion yen on sales of 51.1 billion yen for the business year ended March 31.
Kokusai Kogyo also plans to promote asset sales and downsize its unprofitable bus and taxi operations, the sources said.