As the special measures law for corporate revitalization was revised, the government has started a scheme to inject capital into large companies suffering from the current economic downturn. The Development Bank of Japan will provide funds if companies meet certain conditions.
Conditions for an individual company include employment of 5,000 or more people in Japan on a consolidated basis, a sales decline of 20 percent or more in the past three months from the year before, and an equity capital shrinkage during the same period of 25 percent or more from the year before.
The bank is expected to provide several dozen billion yen for each eligible company. If the company fails, the government will compensate it for 50 to 80 percent of its losses. The total amount of compensation the government is ready to shoulder will be ¥1.6 trillion. Along with the Development Bank of Japan, private banks are expected to supply funds to an ailing company.