Troubled supermarket chain operator Daiei Inc. said Tuesday it will sell its secure-transportation subsidiary to the Carlyle Group, a major U.S. private equity investment company, for roughly 3.5 billion yen in February to reduce group interest-bearing debts.

The acquisition of A.S.S. will mark the first major investment in Japan for the Carlyle Group. A.S.S. provides secure transportation of cash receipts for Daiei group restaurants and handles building management.

Daiei will post about 2.6 billion yen in proceeds on a consolidated basis from the sale of 10,000 A.S.S. Inc. shares held by Daiei and another subsidiary, a Daiei spokesman said.

Daiei and the Carlyle Group plan to sign a contract in late January before the shares are transferred in early February, the spokesman said.

The acquisition will be conducted as a management-led buyout, after which the Carlyle Group will hold a 90 percent stake, the Daiei spokesman said, adding that Daiei and the current management of A.S.S. will each hold a 5 percent stake in the company.

A.S.S. posted 15.4 billion yen in sales in the year ended last February. It had about 2,000 employees as of late August last year.

The Carlyle Group reportedly sees growth potential in the security transport business in Japan, where demand is being fueled by a growing number of banks that contract for the services. The group hopes to support the current management team at A.S.S. while bringing in expertise from overseas.

The Carlyle Group, headquartered in Washington, is a global firm that had $12.5 billion in managed assets as of late September last year.

In a separate move, Daiei also announced it will sell a division of Kobe-based Daiei Logistics Systems, a subsidiary supplying distribution services to convenience store operator Lawson Inc., to a subsidiary of major trading house Mitsubishi Corp. around March 1 to strengthen the finances of Daiei Logistics as well as cut Daiei's debts.

Daiei hopes to sell the operations for around 4.5 billion yen to 5 billion yen.

Daiei is scrambling to reduce its debt load, which stood at 2.3 trillion yen at the end of August last year. It is targeting a 60 billion yen reduction in the six-month period ending Feb. 28. Daiei's share price remains below 100 yen.

Seibu in Loft selloff

Seibu Department Store Ltd. plans to sell about 65 percent of its stake in Loft Co. to supermarket chain operator Aeon Co. and three other firms by the end of the month, sources said Tuesday.

The deal is estimated at 15 billion yen. The proceeds from the sale will be used to repay bank debts following the liquidation of failed group firm Seiyo Corp.

The funds will also be used to help expand the operations of Loft, which is expected to go public in the next few years, the sources said.

Of the stake that will be offloaded, about 25 percent will be sold to the Mori Trust Co. group, 19 percent to the Credit Saison Co. group and 10 percent each to Sogo Co. and Aeon, the sources said.

After the share sale, Seibu will remain Loft's largest shareholder with a 26 percent stake.

Seibu and Aeon have been engaged in cooperative ties since they jointly set up an outlet in Aichi Prefecture in September 2000.

Aeon is expected to establish Loft outlets in its stores, as well as those of Mycal Corp., a failed supermarket operator now undergoing rehabilitation with the help of Aeon.