During a 10-minute meeting Friday, the creditor banks of troubled Iwataya Department Store Co. agreed to waive 28 billion yen of the troubled retailer's debts, trade additional debt for equity and purchase part of a new share issue worth 2.3 billion yen.
Mizuho Corporate Bank and the Bank of Fukuoka also agreed to cut interest rates on remaining loans to Iwataya. No yen value was given.
The two banks, which will shoulder 90 percent of the debt waiver, had already announced their intention to do so, and there was no dissent from the remaining banks, which allowed the meeting to quickly come to its preordained conclusion.
"Our creditors have agreed to shoulder a massive burden," Iwataya President Kenichi Nakamuta said after the meeting. "We will carry out our three-year restructuring plan, making an effort to reach our goal as early as possible."
Nakamuta did not elaborate on his company's goal.
Major department store chain Isetan Co. will join the Bank of Fukuoka and Mizuho Corporate Bank in buying up the struggling Fukuoka-based retailer's 2.3 billion yen share issue.
Tokyo-based Isetan, which will help Iwataya rebuild itself, will become Iwataya's largest shareholder and dispatch an executive to head the retailer. There amount of the debt-for-equity swap between Iwataya and its two main banks was not announced.
In August, Iwataya will close down a store in Hita, Oita Prefecture. , run by a subsidiary in Kurume, Fukuoka Prefecture.
Next February, it will withdraw from a store in Kumamoto that the Kurume subsidiary also operates.