NAGOYA – Dai Nippon Construction filed for court protection from creditors Friday under the fast-track Corporate Rehabilitation Law.
The midsize construction company, an affiliate of Kinki Nippon Railway Co., is the fourth listed construction firm to fail this year.
It follows in the footsteps of Nissan Construction Co. and Sato Kogyo Co., which failed in March, and Fujiki Komuten Co., which collapsed in in June.
The firm filed for protection with the Tokyo District Court.
Dai Nippon Construction’s liabilities are estimated at 297.4 billion yen.
The majority of these liabilities are linked to repayment guarantees the firm has provided to golf course developers, according to credit-research agency Teikoku Databank Ltd.
Listed on the Tokyo, Osaka and Nagoya stock exchanges, the Gifu-based company incurred a net loss of 1 billion yen on group sales of 194.2 billion yen in the 2001 business year.
The company has opened six golf courses since 1989. In 2001, four of its five golf course subsidiaries reportedly had liabilities exceeding assets.
As part of its rehabilitation plan, the company raised 12 billion yen in April 2001 through an allotment of new shares to Kinki Nippon Railway group companies and financial institutions such as Tokai Bank, now called UFJ Bank.
However, Dai Nippon Construction eventually gave up its individual rehabilitation efforts due to Kinki Nippon Railway’s decision to halt its assistance to the contractor as part of its policy of withdrawing from unprofitable operations.
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