Mitsui Mining Co. will be granted debt waivers of 170 billion yen and will become a unit of the governmental Industrial Revitalization Corp. of Japan, sources said Wednesday.

Sumitomo Mitsui Banking Corp., Mitsui Mining’s largest lender, is expected to validate the debt-waiver plan later this week and will call on other creditor financial institutions to cooperate, the sources said.

The New Energy and Industrial Technology Development Organization, a public corporation affiliated with the Ministry of Economy, Trade and Industry, will forgive most of the 60 billion yen in credits it owns against Mitsui Mining.

Other lenders, including banks and life insurance firms, will sell credits worth 10 billion yen to the IRCJ. The revival body will then securitize the credits and invest 10 billion yen in Mitsui Mining to acquire an equity stake of more than 50 percent, the sources said.

Mitsui Mining, which played a role in the postwar reconstruction of Japan as a major coal supplier, will be reborn as a firm that imports fuels and engages in environmental and recycling businesses under the supervision of the government, according to the sources.

While receiving the debt waiver, the firm will reduce about 90 percent of its 11.6 billion yen in capital so it can clear away its capital deficit, which stood at 35.3 billion yen as of March 31.

All of the company’s current managers will resign, with a new management team expected to carry out further job cuts.

The IRCJ is expected to approve its assistance to Mitsui Mining on Monday at the earliest, the sources said.

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