Daiei Inc. will receive a total of 460 billion yen in financial assistance from three major creditor banks, up 40 billion yen from an initial plan, to promote a new three-year restructuring program, according to the final draft of the plan made available Saturday.

The troubled supermarket chain operator will also reduce capital affecting common shares from the initial 50 percent to 99 percent, and close around 60 unprofitable outlets, an increase from the previously projected 50, the draft said.

Daiei hopes the move will help the company return to profitability in the near future. The initial draft, announced Jan. 18, was harshly criticized by investors, who said the restructuring measures were not sufficient to solve the retailer's problems.

The draft was drawn up by Daiei and the three banks -- UFJ Bank, the key component of UFJ Holdings Inc., Sumitomo Mitsui Banking Corp. and Fuji Bank, a member of Mizuho Holdings Inc.

According to the draft, the retailer expanded the scale of its capital reduction and asked the banks to increase their financial assistance in order to finance the closures of the increased number of loss-making outlets and promote parent-only personnel cuts from the initial target of 1,000 to at least 1,400.

The envisaged cut in capital affecting common shares will allow Daiei to obtain additional funds, around 25 billion yen, to finance the restructuring.

The three banks are expected to forgive loans worth 170 billion yen by August. They will also conduct a debt-for-equity swap totaling 170 billion yen, with 160 billion yen eyed for Daiei's preferred shares and 10 billion yen for common shares.

In addition, the lenders will study the possibility of setting up a fresh credit line of up to 100 billion yen. The banks have already established a credit line of up to 500 billion yen for the retailer.

The draft said Daiei will ask other banks it does business with not to recall their loans.

Daiei is also reportedly considering using corporate reconstruction funds provided by the Development Bank of Japan.

The retailer announced Jan. 18 that it had requested a 300 billion yen debt-for-equity swap and debt-waiver deal under which loans held by the banks can be exchanged for new Daiei preferred shares.

The restructuring plan also includes a 100 percent cut in the banks' holdings of Daiei's preferred shares, amounting to 120 billion yen.

The plan is designed to cut Daiei's interest-bearing debts, which rose to 2.3 trillion yen on a group basis as of last August, to less than 1 trillion yen by the end of February 2005, excluding those owed by Daiei OMC Inc., a consumer credit firm.