Aozora Bank, the successor to failed Nippon Credit Bank, has unveiled a plan to repay over a 10-year period the public funds it received in the late 1990s.
The bank said Monday it plans to use installments to repay ¥227.6 billion — the remaining ¥180 billion portion of the government bailout plus a premium — and will seek the consent of shareholders at an extraordinary meeting Sept. 27.
Under the plan, Aozora will repay an initial ¥43.2 billion next June and then ¥20.5 billion annually for the next nine years to 2022. The plan envisions the bank depleting its capital base to generate funds for the repayment, reducing it from ¥420 billion to ¥100 billion.
When public funds were pumped into the bank in 1999 and 2000, the government received convertible preferred shares worth ¥320 billion, of which ¥180 billion worth remain outstanding. On Oct. 3, the government will be empowered to convert most of the shares into common shares with voting rights.