Struggling trading house Sojitz Holdings Corp. will book losses of around 400 billion yen in the current fiscal year, up from the originally planned 250 billion yen, company sources said Friday.
The trading house, a large borrower of UFJ Holdings Inc., will also request that UFJ, Swiss financial services giant UBS AG and Mitsubishi Tokyo Financial Group Inc. provide fresh financial assistance amounting to 350 billion yen, up 100 billion yen from what it had previously sought, they said.
They said the trading house plans to pull out of more money-losing operations. It hopes to improve its financial health further and regain market trust by reducing the future risk of incurring losses, the sources said.
The details will be incorporated into the firm’s new rehabilitation plan, which will be released next week. It envisions selling Tokyo buildings that once served as the headquarters of the company and its predecessor, as well as pulling out of slumping overseas investments, they said.
Under the new plan, Sojitz will revise downward its projected group pretax profit in fiscal 2004 from 85 billion yen to 50 billion yen, the sources said.
With the fresh funds from UFJ, UBS and MTFG, Sojitz accordingly plans to reduce its interest-bearing liabilities, which currently stand at 1.5 trillion yen, to 1 trillion yen.
The company released basic policies on its new rehabilitation plan on July 23. Sojitz Holdings President Hidetoshi Nishimura has indicated that he will resign to take managerial responsibility after the completion of the plan.
The holding company was established in April as the parent of Sojitz Corp., created through the merger of Nissho Iwai Corp. and Nichimen Corp.
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