Midsize general contractor Hazama Corp. plans to ask its major creditor banks to forgive some 110 billion yen in loans, industry sources said Wednesday.
The ailing contractor, which has determined that it is too difficult to write off its bad assets on its own, decided to call for all-out help from creditor banks due to a decline in orders amid the severe business environment, the sources said.
Major creditor Dai-Ichi Kangyo Bank is likely to comply with the request on condition that Hazama review its restructuring plan, they said.
The amount of Hazama’s interest-bearing debts totaled 370 billion yen as of the end of September.
Hazama plans to ask major creditors to forgive 25 percent of all claims, the sources said.
Hazama’s financial condition has deteriorated since the business year to March 1998, when the company reported parent after-tax losses of 72 billion yen due to the liquidation of three affiliated firms.
Despite its efforts to improve earnings and financial conditions with the support of Dai-Ichi Kangyo and other main creditors, the company’s performance has been sluggish, with its stock price remaining below 100 yen.