The Industrial Revitalization Corp. of Japan plans to assist Mitsui Mining Co. under its rescue program, sources said Tuesday.
The IRCJ is expected to formally decide Monday to help revive the natural resources firm by holding a meeting of the industrial revival committee, the body’s decision-making organ, the sources said.
The decision comes as the New Energy and Industrial Technology Development Organization, an affiliate of the Ministry of Economy, Trade and Industry and a major creditor of the firm, has agreed to waive part of the loans it holds, the sources said.
The sources said the IRCJ will likely finalize support for Kyushu Industrial Transportation Co., the largest bus operator in Kumamoto Prefecture, at a meeting of the industrial revival committee Thursday, making it the first client chosen.
It is also expected to decide to assist condominium builder Dia Kensetsu Co. by the beginning of September, the sources said.
Mitsui Mining booked loan-loss reserves of 52.7 billion yen in fiscal 2002 following a call by an auditor for reassessment of real estate owned by subsidiary Mitsui Coal Mining Co. As a result, Mitsui Mining fell into negative net worth, with liabilities of 35.3 billion yen in excess of assets.
Mitsui Mining, established in 1911, implemented a structural reform plan centering on growing sectors such as the recycling business as well as sales of petroleum and coke as part of its efforts to improve business conditions.
The firm also asked for cooperation from Sumitomo Mitsui Banking Corp., its main creditor bank, and other major creditors, including NEDO, which holds loans worth about 60 billion yen, the sources said. METI and NEDO are expected to waive most of the loans they hold, they said.
Once IRCJ decides on a heavily indebted but otherwise viable company to bail out, the company is supposed to conduct large-scale personnel cuts and management teams are to retire.