Resolution and Collection Corp. of Japan has concluded contracts with six banks to farm out corporate rehabilitation efforts under a trust system, the president of the government-backed loan collection body said Thursday.

The system devised by RCCJ is “appreciated” by banks, Akio Kioi told a news conference.

The six banks include Mizuho Bank, UFJ Bank, Aozora Bank and North Pacific Bank.

Other lenders, including the Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corp., are expected to conclude agreements with RCCJ shortly, according to Kioi.

Under the scheme, creditor banks will work out a rehabilitation plan for a troubled company, while RCCJ will act as a facilitator, coordinating various interests.

RCCJ will create a revival fund under trust contracts with investors to buy claims on loans to the company.

It will also supervise the implementation of rehabilitation plans, including debt forgiveness and restructuring.

The program is expected to be effective in rehabilitating small and midsize companies.

RCCJ has so far received some 50 requests for corporate rehabilitation, including one from midsize construction firm Chizaki Kogyo Co., based in Sapporo.

About 20 of the requests submitted came from regional banks and other local financial institutions, according to Kioi.

The body will increase the number of staff members working on the project to “meet requests from financial institutions,” Kioi said. Currently, some 240 RCCJ employees are involved in the scheme.

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