Daiwa Bank and two other commercial lenders on Wednesday agreed to provide 150 billion yen in financial aid to embattled condominium builder Haseko Corp. through a debt-equity swap, Haseko announced Wednesday.

Daiwa Bank, the core of Daiwa Bank Holdings Inc., and its two lending allies, Chuo Mitsui Trust & Banking Co. and the Industrial Bank of Japan, will aid Haseko by converting outstanding loans into Haseko stocks, the company said.

Chuo Mitsui is under Mitsui Trust Holdings Inc. and the IBJ part of Mizuho Holdings Inc.

Daiwa Bank initially proposed the banks shoulder 50 billion yen each in the aid package, but the IBJ and Chuo Mitsui were reluctant, according to sources close to the banks.

The gap was bridged when Daiwa Bank consented to shoulder a greater portion of the burden connected with the debt-equity swap deal, they said.

As a result, Daiwa Bank will provide 54.8 billion yen, Chuo Mitsui 52.8 billion yen and the IBJ 42.4 billion yen for the ailing condominium builder, they said.

Following the agreement, Haseko plans to cut in half its consolidated interest-bearing debts of 540 billion yen in three years by drawing initial strength from the financial aid, the company said.

Haseko has suffered due to its rapid expansion into real estate during the bubble economy in the late 1980s. In 1999, its main creditor banks, led by Daiwa Bank, agreed to waive debts to Haseko totaling 354.5 billion yen, but Haseko asked for additional financial assistance last month.

Haseko plans to reorganize its group of companies into two firms to boost its profitability and rehabilitate itself, the company said.

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