The failed operator of the Seagaia resort complex in Miyazaki Prefecture will soon pay 2.8 billion yen in local tax arrears to the Miyazaki Municipal Government, the company's court-appointed administrator said Monday.
But the company will not pay a 200 million yen penalty for failing to send in the property and corporate taxes on time, said Yasumasa Sato, administrator for Phoenix Resort Ltd.
Sato had asked the municipal government to exempt the company from city taxes, including the penalty, so that it could repay its other debts.
However, an official at the municipal government said Monday the city government will continue asking the group to pay the penalty, saying the payment of taxes should be given priority over repayment of loans.
Sato said the decision to pay the tax arrears was made as U.S. investment fund Ripplewood Holdings LLC plans to purchase the resort complex for between 16.2 billion yen and 18 billion yen, a figure well above the 10.5 billion yen initial estimate of the value of Seagaia's assets.
Ripplewood has been named by the Miyazaki District Court as a sponsor to head Seagaia's rehabilitation.
Sato also cited the municipal government's decision to purchase a zoo operated by the Seagaia group as another factor behind the policy change.
Sato said he will discuss the matter of the penalty with the municipal government.
Phoenix Resort and its two affiliates have been undergoing court-sponsored rehabilitation since filing for court protection from creditors in February with liabilities of 326.1 billion yen.
Phoenix Resort was jointly set up in December 1988 by the Miyazaki Prefectural Government, which holds a 25 percent stake, the Miyazaki municipal government, and 11 private companies.