Struggling construction firm Hazama Corp. said Thursday it is asking fellow midsize builder Ando Corp. to take a stake in it and dispatch directors under its new three-year business plan.
"Provided the new Hazama three-year plan is pushed through, we are asking them to do so," Hazama said in a brief statement.
The statement was issued following a newspaper report that Ando is in final talks to take a stake in Hazama.
The Nihon Keizai Shimbun reported Thursday morning that Ando is expected to acquire about 10 percent in Hazama, which in the fall will be revamped into a new entity specializing in construction.
Under the three-year plan announced in January, Hazama will on Oct. 1 divide itself into a construction company and a real estate company, to which it will transfer Hazama's nonperforming assets and a major part of its interest-bearing debts.
According to the financial daily, Ando is also expected to dispatch directors to the new construction entity, while Ando and Hazama will jointly procure materials, develop technology and cooperate in attracting new clients.
Hazama's main bank, Mizuho Corporate Bank, aims to support the move and dispatch directors to the new construction firm as well.
Improving Hazama's finances through spinoffs is one of the conditions set by Ando for a capital and business tieup with the ailing contractor, the newspaper said.
According to the current plan, Hazama will drastically shrink its construction operations leaving the civil engineering department intact, and rush to improve finances by gaining business and technological knowhow from Ando, the paper said.