Ailing Sanyo Securities Co. disclosed Sept. 26 that it is seeking additional financial assistance from the three banks with which it has close ties in an effort to improve its balance sheets.
The possibility of raising fresh capital through a third-party allocation of new Sanyo shares is one option currently under consideration in talks with the Bank of Tokyo-Mitsubishi, Daiwa Bank and Nippon Credit Bank, top Sanyo executives said. Sanyo also needs to devise a solid plan to resurrect its operations. This was the condition under which the nation’s top nine life insurance firms agreed in July to extend by three months the July 31, 1998 deadline for repayment of their subordinated loans to Sanyo.
Firms cannot count subordinated loans as part of their assets once there is less than one year until the deadline for their repayment. Managing Director Takashi Kaminami said a restructuring plan, which includes revisions to the firm’s wage system, was also being planned.
According to projections released last week, Sanyo said it expects to log pretax losses of 4.4 billion yen for the first half of the business year, which ends this month.