Trading house Itochu Corp. plans to acquire a 21 percent stake in consumer credit card company Orient Corp., thereby becoming its largest shareholder, the two companies said Thursday.

The 68.3 billion yen deal should be completed by April 6, they said.

Itochu believes Orient’s large customer base and business networks will boost sales to individual customers, while Orient believes its financial standing will improve through the capital tieup, company officials said.

Under the deal, Orient will issue 86.21 million common shares for 24.3 billion yen to Itochu, giving it a 10.4 percent stake.

The trading house will also acquire an additional 87.95 million existing common shares, or a 10.6 percent stake, for 24 billion yen from firms close to Mizuho Financial Group Inc.

The current top shareholder in Orient is Mizuho Corporate Bank, which holds a 4.4 percent stake.

Itochu will also obtain 40 million preferred shares for 20 billion yen from Mizuho Corporate Bank, and send executives to Orient to join its management team.

Orient currently has 23 million individual customers and a network of 620,000 member stores in its credit card business. It is also strong in the automobile loan business.

The credit card firm suffered when Japan’s speculative bubble burst in the early 1990s. It has been rebuilding its business with help from the Mizuho financial group.

With the Itochu capital tieup, Orient plans to accelerate its disposal of nonperforming loans. The credit card firm has downgraded its group net profit forecast for fiscal 2004 from 30 billion yen to 700 million yen, having increased its disposal expenses.

Itochu aims to expand its business front from its current mainstay of merchandise sales to retail financial operations, the officials said.

The investment in Orient is Itochu’s largest since 1998, when it invested 135 billion yen in convenience store chain FamilyMart Co.

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