The state-run Deposit Insurance Corp. will buy loans from Shinsei Bank to Sogo Co. and then waive a substantial portion of them to help rehabilitate the struggling department store operator, DIC sources said Saturday.
The step is expected to pave the way for Sogo to reach an agreement with creditor banks on its request for forgiveness of loan repayments totaling 631.9 billion yen.
Shinsei's reluctance to waive loans to Sogo has been a major stumbling block to the department store operator's rehabilitation plan.