The Bank of Tokyo-Mitsubishi will launch a special task force in September to deal exclusively with corporate rehabilitation for some 3,000 troubled borrowers.
The task force will use a variety of financial techniques, including mergers and acquisitions, and securitization, to cut bad loans and get the corporate borrowers back on their feet by March 2005, bank officials said Friday.
The amount of loans to those borrowers total some 2 trillion yen, representing most of the bank’s bad debts, the officials said.
The bank is the core of Mitsubishi Tokyo Financial Group Inc. and is the latest among major banks to announce plans to accelerate rehabilitation of troubled corporate borrowers in a bid to solve long-standing bad-loan problems.
Mizuho Financial Group Inc. and UFJ Holdings Inc. have created new firms charged with corporate rehabilitation, while Sumitomo Mitsui Financial Group Inc. has announced a plan to establish a rehabilitation fund.
On Thursday, the government’s Industrial Revitalization Corp. of Japan decided to bail out condominium builder Dia Kensetsu Co. and two other struggling firms.
The Bank of Tokyo-Mitsubishi officials said the task force will launch two teams. One, consisting of some 30 employees, will handle about 500 large and midsize companies, while the other, with 30 to 40 employees, will deal with 2,500 smaller firms.
The task force will cooperate closely with Mitsubishi Trust & Banking Corp. and Mitsubishi Securities Co., members of Mitsubishi Tokyo Financial Group, and Phoenix Capital Co., a business revival fund that has ties with the group, the officials said.
The size of the task force is expected to reach 100 people eventually, they said.