The president of medium-size general contractor Aoki Corp. denied market rumors Sept. 22 that his firm was in a financial crisis, stressing that the company has been steadily reducing its debts.

The company’s stock nosedived below its 50 yen face value on the rumors Sept. 22, ending up at 35 yen, a 22 yen drop from last week’s finish. It is the first time that a stock listed on the First Section of the Tokyo Stock Exchange has dropped below face value since September 1995, when shares of Nippon Housing Loan Co., one of the failed “jusen” mortgage lenders, dropped below 50 yen.

“The sharp drop of our stock price was triggered by some securities firms’ moves to sell, but the move is groundless,” Yoichiro Yano, president of Aoki Corp., told a news conference at the TSE. “There is no relation to the stock price and the current financial condition of our company.”

Yano said the company expects to post total revenues of 143 billion yen and operating profits of 3.6 billion yen for the first half of the 1997 business year, ending Sept. 30. The company also predicted it will post pretax profits of 1 billion yen for the same period, he said.

When the company’s stock dropped below the 100 yen line in July, Yano held a similar news conference and denied the firm was in a financial crisis. Aoki holds a huge amount of repayment guarantees, as well as liabilities with interest payments.

Concern over the health of the nation’s construction industry has been increasing recently, and three contractors on the TSE’s first section — Tokai Kogyo Co., Tada Corp. and Daito Kogyo Co. — have already gone bankrupt this year.

Kunihiko Inaba, vice president of the company, said the amount of its repayment guarantees has decreased from 285 billion yen in March to 263 billion yen this month. However, the company still holds about 340 billion yen worth of liabilities with interest payments. Inaba stressed that Asahi Bank and Industrial Bank of Japan, the firm’s two main banks, continue to support the company.

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