Mitsui Construction Co. announced a five-year restructuring plan Friday under which the ailing general contractor will ask about 10 creditor financial institutions, including Sakura Bank, to forgive debts totaling 163 billion yen.

The plan, which covers fiscal 2000 to 2005, calls for 370 jobs to be cut, reducing the firm's total workforce to 2,900 by the end of March 2003.

The midsize general contractor will also reduce its capital from the current 22.79 billion yen to 8.46 billion yen after seeking approval at its June shareholders' meeting.

To strengthen its financial base, however, the company will ask the Mitsui group, which includes Mitsui & Co. and Mitsui Fudosan Co., to buy new shares through a third-party allocation by the end of September 2001.

President Kazuhiro Inamura said he and two vice presidents, who have representation rights, will step down to take responsibility for the firm's management failure.

"We will resign when the debt waiver request is accepted by the creditors or when our shareholders approve the capital reduction," he said.

Inamura explained that despite the firm's efforts to rebuild itself without asking for debt waivers, it had to change the policy due to new accounting based on market values, not book values.

While the firm held 468.5 billion yen in consolidated interest-bearing debts as of the end of March 2000, the restructuring plan calls for reducing that figure to 169.1 billion yen by the end of March 2006 by selling as much off its assets as possible.

With the debt waivers and reduction in capital, the firm plans to write off 170.4 billion yen in nonperforming assets within fiscal 2000.

Mitsui Construction officials said the firm will put more emphasis on construction of high-rises and consulting businesses and on reinforcing cost-cutting efforts.

In a related move, Mitsui Construction announced Friday that it expects to post 7.9 billion yen in consolidated net losses for fiscal 2000, revising its earlier break-even projection in consolidated net earnings.

Its consolidated pretax profits will, however, reach 7 billion yen, up 7.7 percent from the previous forecast. Group sales, meanwhile, will rise 1.7 percent to 412 billion yen, according to the revised earnings projections.

On a parent-only basis, the firm predicts it will report 14.3 billion yen in net losses, compared with an earlier projection of 100 million yen in net profits.

Pretax profits will increase 17.3 percent from the previous forecast to 8.8 billion yen, and sales will reach 401.6 billion yen, up 0.4 percent from an earlier forecast.