Mizuho Holdings Inc. held an extraordinary shareholders’ meeting Wednesday in which it was given the green light to raise the ceiling on preferred share issues — a measure aimed at bolstering its capital by 1 trillion yen to accelerate bad-loan disposal.

The banking group is set to book more than 2 trillion yen in loan-loss charges for fiscal 2002, forcing Mizuho Holdings to suffer a consolidated net loss of 1.95 trillion yen.

At the outset of the meeting, Mizuho Holdings President Terunobu Maeda apologized to shareholders over the group’s inability to pay a dividend to holders of common shares due to the massive loss.

He then told the meeting that negotiations are under way between management and the group’s labor union over cuts in the employee summer bonus.

Management is seeking a cut of 40 percent for department chiefs and branch heads, a 30 percent cut for other managerial-level employees and a 20 percent reduction for rank-and-file employees, he said, adding that the cuts amount to 15 billion yen.

Although some shareholders raised questions over management responsibility, participants voted down a no-confidence motion against Maeda as chairman of the ad hoc meeting.

As company presidents usually chair shareholders’ meetings, the motion was, in effect, a gesture of dissatisfaction over Maeda’s management.

To replenish its dwindling capital base, Mizuho has asked major clients and foreign banks to purchase the planned new shares.

Shareholders’ approval to change necessary corporate bylaws is required before management can negotiate a deal with prospective investors.

Shareholders also endorsed a plan to set up a new holding company, Mizuho Financial Group Inc., on March 12 and set the maximum amount of issuance for three categories of preferred shares.

They approved a plan to transfer 3.24 trillion yen of Mizuho Holdings’ capital reserves to the capital surplus account to cope with future losses.

Mizuho Holdings said last week the balance of bad loans at three of its banks had grown to 5.62 trillion yen as of Dec. 31 from the 5.42 trillion yen logged as of Sept. 30, following a strict reassessment of the quality of outstanding loans at the three banking arms.

Meanwhile, Mizuho Asset Trust & Banking Co. and Mizuho Trust & Banking Co. obtained approval for the planned merger March 12 of the two companies at separate ad hoc shareholders’ meetings.

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