Willcom Inc. may seek financial support from Enterprise Turnaround Initiative Corp. of Japan to rehabilitate its operations, sources said Friday.
Willcom, which has suffered in fee-cutting competition with cell phone service providers, is keen to draw on credit from the state-backed corporate turnaround body, which can raise government-guaranteed funds, they said.
Softbank Corp., one of Willcom’s rivals, is considering funneling funds into its capital base, as Willcom mulls tapping ETIC resources, they said.
Last September, Willcom, Japan’s largest provider of personal handy-phone system services, started out-of-court alternative dispute resolution proceedings and has been asking its creditors to delay repayment schedules for its debts worth ¥90 billion.
But Willcom has been having difficulties drawing up its reconstruction plan.
The PHS service provider wants to engineer a speedy reconstruction by utilizing ETIC, the sources said.
Last year, Willcom started offering a next-generation high-speed data transfer PHS service dubbed Willcom Core XGP.
Willcom appears to be eager to secure funds to finance large capital outlays necessary to expand the XGP network on the strength of the envisioned ETIC support.
ETIC is likely to emerge as the biggest shareholder under the plan, the Nikkei newspaper reported earlier. Softbank Corp. and Advantage Partners LLP may also take stakes, the report said. Willcom and the turnaround agency may ask creditors for tens of billions of yen in debt relief, the report said.
Closely held Willcom had ¥90 billion in long-term debt and ¥38.5 billion in obligations due within a year, according to the latest financial filing. Washington-based Carlyle Group owns a 60 percent stake in the company and electronics maker Kyocera Corp. has 30 percent.
Tokyo-based Willcom provides wireless service using PHS technology, which is slower than the 3G connection offered by rivals Softbank and KDDI. Willcom has 4.3 million subscribers.
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