Tokyo Electric Power Co. and three Japanese banks bought stakes in Recruit Co., a labor market publishing and information conglomerate, in late March, industry sources said Thursday.
The selling of the equity stake is part of Recruit's plan to bolster its financial standing and prepare to have its shares listed on stock exchanges in fiscal 2004, the sources said.
Tepco purchased a 5 percent stake in Recruit, while Industrial Bank of Japan, Sanwa Bank, and Sumitomo Mitsui Banking Corp. took 2 percent each, according to the sources. The four firms are believed to have paid a combined 45 billion yen for the 11 percent equity stake, they said.
For Recruit, the cash will enable it to cut its interest-bearing debts and help secure "stable" shareholders.
Recruit's interest-bearing debts were estimated at 700 billion yen as of March 31. The company needs to reduce that figure to around 400 billion yen in order to meet listing requirements.
Tokyo Electric Power hopes the capital tieup with Recruit will help it extend its reach into new business areas, such as those related to the Internet, the sources said.
The three banks, the main lenders to Recruit, will strive to help the firm improve its financial condition, they said.
In 1992, Recruit came under the control of retailer Daiei Inc. As Daiei later got into financial trouble, it sold its 25.2 percent stake to the Recruit group firms for 100 billion yen in February 2000.
Recruit plans to sell the remaining part of the former Daiei stake to other firms by the end of this fiscal year, the sources said.
Recruit chalked up unconsolidated pretax profits of 85 billion yen on revenues of 280 billion yen for the business year that ended on March 31.