The troubled Long-Term Credit Bank of Japan on Friday announced a restructuring plan in which three top executives will resign and its 13 overseas outlets will close.

The plan is being undertaken to enable a merger with Sumitomo Trust & Banking Co. by paving the way for a critical public funds injection needed to remove a heavy load of bad loans from the books of the troubled bank.

According to the plan, the bank is to:

1) Write off some 750 billion yen in bad loans during its book closing for the April-September first half of fiscal 1998.

2) Give up claims on 520 billion yen in loans to three nonbank financial affiliates, including Japan Leasing Corp.

3) Retreat from all overseas operations and combine or close domestic operations.

4) Cut 700 employees, or 20 percent of its workforce, by the end of this fiscal year.

5) Force the resignation of top management, including President Katsunobu Onogi.

6) Ask retired top management to return their retirement money.

7) Sell its headquarters building in Tokyo’s Marunouchi district.

8) Ask for a supply of public funds from Deposit Insurance Corp.

LTCB and Sumitomo Trust announced the merger plan in late June, but Sumitomo Trust has been leery of merging because of the amount of nonperforming loans it would be forced to inherit. Sumitomo Trust has been insisting that it only take over the bank’s performing loans to ensure a sucessful merger.

The executives resigning are Chairman Takao Masuzawa, President Onogi and two vice presidents — Masami Suda and Takashi Uehara.

The bank will apply for the infusion of public funds via a special panel of the Deposit Insurance Corp. to strengthen its capital base as soon as possible, President Katsuo Onogi told a news conference in Tokyo. The amount of funds needed is not yet known because its capital adequacy ratio and details in the merger talks must be considered, Onogi said.

LTCB said it hopes to reach a merger agreement with Sumitomo Trust next month.

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