A government agency said Thursday it will help financially strapped Nakayama Steel Works Ltd. turn around its operations.
If the midsize steelmaker's condition worsens further, it could lead to a loss of many jobs, greatly impacting the Osaka economy, an official in the Regional Economy Vitalization Corp. of Japan said.
Nakayama said it will ask its creditor banks to forgive its debt of about ¥60.2 billion and issue some ¥9 billion new shares to its top shareholder, Nippon Steel & Sumitomo Metal Corp., and others.
In an effort to further restructure its business, the company will replace President Hiromu Fujii with Shunichi Morita, a former senior executive of steel firm Toyo Kohan Co., on June 18.
Nakayama will conduct equity swaps to turn its five group firms into wholly owned subsidiaries so it can bring together resources that have been dispersed and improve operational efficiency.