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Administrators of Tokyo Sowa Bank, a collapsed regional bank now under state control, announced Tuesday that they have signed a basic agreement to sell the bank to an investor group led by U.S. financier Wilbur Ross.

The decision was approved by the Financial Reconstruction Commission earlier in the day, officials said.

The negotiating parties are expecting to reach a final agreement by the end of September and transfer operations by the end of March.

The Ross fund will put up 35 billion yen in capital to buy Tokyo Sowa. The bank will also request 18 billion yen in public funds to beef up its capital base. As a result, the bank’s capital adequacy ratio will surpass 9 percent — well over the 4 percent required for domestic banks, Ross told a news conference in Tokyo accompanied by the bank’s administrators.

The Ross fund was selected because its proposal called for the government to inject less public funds into the insolvent bank than the proposals submitted by two other bidders, the administrators said.

In the negotiations leading up to Tuesday’s announcement, H.I.S., a discount air ticket agency, and Shinsei Bank — formerly the Long-Term Credit Bank of Japan, which was sold in March to an international consortium led by Ripplewood Holdings LLC. — had also entered bids.

Ross is leading the Asian Recovery Fund, an investment fund selected in May as the buyer of Osaka-based Kofuku Bank, another collapsed second-tier regional bank.

Ross said his group of investors will resuscitate Tokyo Sowa as well as Kofuku by placing both of them under a holding company to be set up around autumn. He added that the two banks might be eventually merged, depending on government approval.

“We believe that combining Tokyo Sowa Bank into the same company as Kofuku Bank will provide much strength to both of the two banks,” Ross said. “We believe there would be considerable synergies between Tokyo Sowa and Kofuku.”

The holding company will coordinate the activities of the two banks, providing assistance in such areas as marketing, asset securitization and distribution of asset management products, he added.

Ross expressed confidence that his fund — whose investors include major pension funds in California and Wisconsin — will turn Tokyo Sowa into a profitable bank, building on the bank’s strength of having business with individuals and small and midsize firms.

The Ross fund will take over more than 56 of the existing 100 branches of Tokyo Sowa. Of the bank’s 2,000 full-time employees, the fund has pledged to re-employ at least 1,085, according to the officials.

The cost shouldered by the government for Tokyo Sowa is expected to top 700 billion yen, the administrators said. The figure includes some 430 billion yen to clear the capital deficit of the bank and 230 billion yen in additional loss reserves for loans to be taken over by the investment fund.

Walter Mondale, a former U.S. ambassador to Japan, is tapped to become the new bank’s top adviser. The bank is also negotiating to select a Japanese banker with experience as a director as its representative director, officials said.

With the agreement to buy Tokyo Sowa Bank now in place, four of the five second-tier regional banks Japan has placed under state control since October 1998 on the strength of the financial-system revival law have found buyers. The remaining Niigata Chuo Bank is also expected to be sold to a regional bank operating in the same prefecture.