FUKUOKA – Mycal Kyushu, a unit of failed retailer Mycal Corp., plans to form a group of firms led by midsize supermarket chain Izumi Co. to sponsor an rehabilitation plan, company officials said Thursday.
The Fukuoka-based Mycal Kyushu, which opposes a rehabilitation plan put forward by Aeon Co., a key sponsor of the parent firm’s revival efforts, will ask some major retailers and local business partners to join the group, the officials said.
Aeon’s rehabilitation plan would involve job cuts, according to Mycal Kyushu, which said it is confident it can rebuild itself by forming a group of supporters based around the Hiroshima-based Izumi.
Mycal Kyushu President Zenjiro Hirose said his company and Izumi have ensured the continued employment of Mycal Kyushu employees and that it will continue doing business with its local partners.
Mycal Kyushu will not allow Izumi to take more than a 50 percent stake in the company because it plans to rehabilitate itself through the efforts of its employees, the officials said.
The company also unveiled a draft plan to make a lump-sum payment of 10 percent to 20 percent of its debts.
Izumi said it will offer logistic support for Mycal Kyushu’s rehabilitation efforts and will not interfere with operations. “We are not considering sending directors or employees (to Mycal Kyushu),” an Izumi executive said. “We have no plans to take part in its management.”
In April, Mycal filed a request with the Tokyo District Court and a group of 11 creditor companies filed a request with the Fukuoka District Court to have Mycal Kyushu launch a fresh restructuring program under the Corporate Rehabilitation Law.
A receiver will draw up a rehabilitation program for Mycal Kyushu once the courts approve the application of the Corporate Rehabilitation Law to the firm.
It remains uncertain whether Mycal Kyushu’s plan to create a support group will be realized.
In September, Mycal and Mycal Kyushu applied to the Tokyo District Court for protection from creditors under the Civil Corporate Revival Law.
But the parent firm later asked the Kyushu unit to change its reconstruction plan, switching to the more rigid Corporate Rehabilitation Law because Aeon was opposed to Mycal Kyushu’s reform being carried out under the Civil Corporate Revival Law.
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