The court-appointed administrator of ailing consumer lender Takefuji Corp. said Monday it has decided to give South Korea's A&P Financial Co. preferential negotiating rights in becoming the sponsor for its rehabilitation.
The South Korean consumer lender will be formally designated as the sponsor around the end of April after gaining approval from the Tokyo District Court.
The announcement signifies a step forward for Takefuji, which is keen on restarting its lending business as soon as possible, while A&P Financial appears eager to enter Japan's consumer loan market.
On Sept. 28 last year, Takefuji, burdened by massive claims by customers for reimbursement of excessive interest charges, filed for bankruptcy protection.
Takefuji has since been trying to find a sponsor to finance its court-backed rehabilitation under the Corporate Rehabilitation Law.
The Tokyo-based company was once Japan's biggest lender with outstanding loans of around ¥1.77 trillion as of March 2002.
Takefuji saw its operations deteriorate after a 2006 Supreme Court ruling invalidated "gray area" interest charges beyond those defined by the interest rate restriction law. The ruling induced claims from borrowers for reimbursement of the excess charges.