Shokusan Jutaku Sogo Co., a leading builder of custom-made houses, on Sunday filed for court protection from creditors with liabilities of 13.5 billion yen, the company said.

Known for its Homest brand, the company applied for protection under the Civil Corporate Revival Law with the Tokyo District Court after holding an extraordinary board of directors' meeting earlier in the day.

The firm, listed in the First Section of the Tokyo Stock Exchange, took the legal action under fast-track legislation for corporate rehabilitation after it gave up efforts to rehabilitate itself as the sluggish housing industry weighed heavily on its profitability, the company said.

In 1999, Shokusan Jutaku was granted debt-forgiveness of 65 billion yen from creditor banks, including Sanwa Bank.

The company is expected to aim at rehabilitating itself through financial support from Misawa Homes Co. and Painthouse Co., industry sources said.

Shokusan Jutaku is also expected to withdraw from sales of new homes and to shift to the renovation and maintenance of houses, the sources said. Businesses related to new homes will be transferred to Painthouse in Kanagawa Prefecture, they said.

Homes currently under construction by Shokusan Jutaku will be completed as planned, the company said.

Shokusan Jutaku President Katsuhiko Nishimura said at a news conference in Tokyo, "We were likely to be in liabilities in excess of assets had we continued our businesses."

The TSE said Sunday it will delist Shokusan Jutaku on April 14 after transferring it to a liquidation post Monday.

Shokusan Jutaku, established in 1950, posted sales of 42 billion yen and a 1.7 billion yen net loss on a consolidated basis for the fiscal year that ended in March 2001. The company has 740 employees, of whom 530 are regular staff.

In another case of corporate failure following debt-forgiveness, midsize construction contractor Aoki Corp. on Dec. 6 filed for court protection from creditors, with consolidated liabilities of 522 billion yen.

Daiei maps debt plan

Struggling supermarket chain operator Daiei Inc. plans to reduce its group interest-bearing debts by 750 billion yen by February 2005, company sources said Sunday.

Daiei is in talks with its main creditor banks on the debt-reduction plan and is expected to reach a conclusion on the plan within the next week, the sources said.

-- Sanwa Bank, Fuji Bank, Tokai Bank and Sumitomo Mitsui Banking Corp. --

In October, Daiei said it plans to reduce its group interest-bearing liabilities by some 800 billion yen from 2.3 trillion yen to less than 1.5 trillion yen by February 2007.

If the new debt-reduction plan proceeds as planned, Daiei group's interest-bearing debts, excluding those of Daiei OMC Inc., a Tokyo-based consumer credit company, will be reduced to less than 1 trillion yen by February 2005, two years ahead of the original plan, the sources said.

Daiei aims to reduce 750 billion yen in debts by using 150 billion yen in cash flow, 200 billion yen to 300 billion yen by selling its assets and operations, and 300 billion yen to 400 billion yen through fresh financial help from the main creditor banks under measures including debt forgiveness and a debt-for-equity swap, the sources said.

The interest-bearing liability of the Daiei group is expected to total 2.240 trillion yen at the end of February, including 490 billion yen held by Daiei OMC.