KUMAMOTO – Struggling bus firm Kyushu Industrial Transportation Co. may be among the first companies bailed out by the Industrial Revitalization Corp. of Japan, an official of its main creditor, Mizuho Bank, said Wednesday.
“I hear the IRCJ will decide to support (Kyushu Industrial) possibly during August,” Masahiko Nonomura, head of the bank’s business consulting office, told a news conference.
The government-backed IRCJ started operations in May to help rehabilitate heavily indebted companies deemed still viable. It is expected to select its first clients by the end of August.
Kyushu Industrial, based in Kumamoto, unveiled a rehabilitation plan July 11. It asked its creditor banks, including Mizuho Bank, to forgive debt totaling 21.7 billion yen and sought assistance from the IRCJ.
Kyushu Industrial had interest-bearing debts of 56.9 billion yen on a consolidated basis in the business year through March 31. As a result, its liabilities surpassed assets by 2.7 billion yen.
But the IRCJ believes the firm could achieve an early revival if management resources are concentrated on the core bus operation.
If it decides to bail out Kyushu Industrial, creditor banks will be asked to waive part of debts before the IRCJ buys out the remaining debts.
That way, the bus firm would be encouraged to rehabilitate itself within three years.
Since its launch in May, the IRCJ has been examining rehabilitation plans submitted by about 20 candidate firms to assess their viability.