Apartment rental service Leopalace21 Corp. will purchase a 37.25 percent stake in Dia Kensetsu Co. to help revive the troubled condominium builder, the two companies said Friday.
Under the agreement, Leopalace21 will buy 3 billion yen worth of new shares to be issued by Dia Kensetsu in early 2004, making it the condominium builder's largest shareholder, the two firms said.
Once the shares are bought, Leopalace21 President Yusuke Miyama will become an outside director of Dia Kensetsu, they said.
Last month, Dia Kensetsu reduced its capital by 99 percent. It has asked Resona Bank and other creditor banks to swap 40 billion yen in debts for equity.
The state-backed Industrial Revitalization Corp. of Japan announced in late September that it will buy some of Dia Kensetsu's debts.
With those bailout measures, Dia Kensetsu will strive to reconstruct itself by shifting more of its management resources to the core condominium business.