A private equity fund headed by a former executive of the Fast Retailing Co. casual clothing chain has emerged as a possible investor in troubled retailer Daiei Inc., the Financial Times reported Monday.

The investment by Kiacon Corp., which is believed to have links with billionaire financier George Soros, would enable Daiei to remain independent, fending off attempts by its creditors to send it to the government-backed Industrial Revitalization Corp. of Japan, the British daily said.

Daiei’s three main banks — UFJ Bank, Sumitomo Mitsui Banking Corp. and Mizuho Corporate Bank — have told Daiei, which has interest-bearing debts of more than 1 trillion yen, to seek help from IRCJ.

But the nationwide supermarket chain has rejected the idea, insisting it can revive itself.

Kiacon, which has funds worth about $100 million, is apparently interested in purchasing part of Daiei’s loans from the three banks, the paper said. It quoted industry observers as saying that a Kiacon consortium could raise up to 120 billion yen to buy the loans.

A Kiacon official, however, described the report as “groundless.”

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