Nissho Iwai Corp., a major trading firm struggling under heavy financial burdens, will carry out a drastic restructuring that will halve its textile business, company sources said Tuesday.
In its medium-term streamlining plan to carried out through March 2002, the company aims to reduce consolidated interest-bearing debts worth 3.4 trillion yen as of March 31, 1999, to some 2.3 trillion yen, the sources said.
Among other things, the company plans to transfer half its textile operations to affiliated companies while streamlining real estate businesses both in Japan and overseas.
Nissho Iwai's areas of strength, such as its steel and machinery businesses, will also be subjected to drastic change, they said.
To reduce payrolls, the trading house will soon establish an incentive program to encourage early retirement.
In its textile operations, which account for 3 percent of overall consolidated sales, the firm will retain its apparel business, principally brand names, but transfer materials trade to affiliated companies.
To streamline its real estate business, the company will suspend fresh overseas investment, such as office building development.
For the latest fiscal year, Nissho Iwai posted 98.5 billion yen in net losses. Inviting board members from its main banks, such as Sanwa Bank and Dai-Ichi Kangyo Bank, the company has been trying to reinforce its financial standing.