Struggling contractor Hazama Corp. released on Friday a three-year reconstruction plan under which it will split itself into two firms, while its president expressed a willingness to conduct management integration with other unspecified builders.

On Oct. 1, Hazama will divide itself into a construction company and a real estate company, to which it will transfer its nonperforming assets and a major part of interest-bearing debts, the firm said in a statement.

Hazama said it will cut its parent-only interest-bearing debts of 199.4 billion yen as of March 31, 2002, to 48.3 billion yen at the envisioned construction firm by Oct. 1.

To eliminate a major part of its interest-bearing debts, Hazama said it will ask its creditor banks, including its main bank, Mizuho Corporate Bank, to provide financial assistance.

“Our main bank, Mizuho Corporate Bank, in principle endorsed our company’s new reconstruction plan,” it said in the statement.

But the statement stopped short of specifying how exactly Hazama plans to cut its debts.

On Thursday, banking industry and Hazama sources said the firm will ask for a debt waiver from its creditor banks totaling 150 billion yen.

The sources said the bailout request will be the backbone of a new restructuring plan compiled by Hazama.

Fumiya Yamato, president of Hazama, told a news conference Friday that his company favors integrating its management with other construction companies. But he stopped short of mentioning any integration agreement with other builders.

He also denied news reports earlier in the day that quoted Hazama sources as saying the company has begun negotiations with midsize builders Toa Corp. and Ando Corp. to form a capital alliance, with an eye toward future management integration.

In September 2000, Hazama struck a deal with its four main creditor banks, including the defunct Dai-Ichi Kangyo Bank, in which the banks forgave a combined 105 billion yen in loans to the firm. DKB later merged into the Mizuho Financial Group under Mizuho Holdings Inc.

On a group basis, Hazama’s interest-bearing debts stood at 262.6 billion yen as of the end of fiscal 2001.

Under the new restructuring plan, the company will further slash its parent-only workforce to 1,948 by the end of March in 2006 from 3,085 as of March 31, 2002, the sources said.

Established in 1889 and ranked 10th in the industry, Hazama is capitalized at 24.2 billion yen. It recorded a consolidated pretax profit of 10.4 billion yen on sales of 416.9 billion yen in fiscal 2001.

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