The proposed rehabilitation of Daiei Inc.'s Fukuoka hotel, ballpark and baseball business will feature the sale of assets and financial assistance from the supermarket giant's six main banks, sources connected with the plan said Wednesday.
Daiei does not plan to resort to the government's Industrial Revitalization Corp. of Japan to rehabilitate the ailing businesses.
It will sell the Sea Hawk Hotel and Resort and the Fukuoka Dome stadium to U.S. investment fund Colony Capital LLC but will hold onto the Fukuoka Daiei Hawks baseball team, the sources said.
Daiei will conduct an equity swap for its loans to the baseball club to improve its financial standing, according to the sources.
Colony Capital is expected to take over about 60 billion yen of the 120 billion yen in interest-bearing debts held by the Fukuoka operations, and Daiei will repay the remaining 60 billion yen by selling off group assets and obtaining debt waivers from the six banks, the sources said.
Colony Capital will invest 20 billion yen in the Daiei affiliate that runs the Fukuoka operations, according to the sources.
The asset liquidation will focus on the sale of shares owned by another Daiei subsidiary, Fukuoka Daiei Real Estate Inc., in Shinkobe Oriental Hotel and other leisure facilities.
It will generate 35 billion yen in proceeds, the sources said.
The remaining 20 billion yen in debts will be repaid through debt waivers by the six banks, the sources said.
These are UFJ Bank, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp. and three regional banks in Fukuoka.