Trading house Marubeni Corp. will lead Daiei Inc.’s rehabilitation by acquiring a 33.4 percent stake in the struggling retailer now held by Industrial Revitalization Corp. of Japan, sources said Saturday.
With the deal, which could take place in the next seven days, Marubeni will replace the government-backed turnaround body as Daiei’s biggest shareholder with a 44.3 percent stake, the sources said.
The IRCJ is expected to complete its rehabilitation support for Daiei at the end of this year, one year ahead of schedule, paving the way for the agency to be disbanded next spring, according to the sources.
The IRCJ last year picked an alliance of Marubeni and investment fund Advantage Partners LLP as Daiei’s sponsors, with the two given preferential rights to acquire the retailer’s shares from the IRCJ.
Marubeni now holds a 10.9 percent stake in Daiei, while Advantage Partners owns 23.4 percent.
There will be no change in Advantage Partners’ stake following the planned deal, the sources said.
Under an earlier plan, both Marubeni and Advantage Partners were scheduled to acquire the Daiei shares from the IRCJ.
However, they judged it better for Marubeni, active in the retail business, to acquire all of the IRCJ stake and take the leadership in its rehabilitation, the sources said.
Marubeni has close links to Daiei in the food distribution business.
Daiei has been undergoing rehabilitation with the help of the IRCJ since December 2004.
Daiei secured a parent-only operating profit in the March-May quarter due to store closures and other cost-cutting efforts.
The IRCJ will be able to avoid seeking an additional burden on taxpayers as proceeds from the sale of its Daiei shares are expected to exceed the roughly 50 billion yen it invested in the retailer, the sources said.
Daiei is the last major company subjected to rehabilitation under the auspices of the IRCJ. The agency took over 160 billion yen in debts owed by Daiei.
Selling the loan claims to financial institutions will be the final task for the IRCJ in supporting Daiei’s rehabilitation, the sources said.
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