Business / Corporate

Akebono Brake to accept ¥20 billion from turnaround fund

JIJI

Struggling auto parts maker Akebono Brake Industry Co. said Thursday it will receive ¥20 billion in fresh capital from Japan Industrial Solutions Co., a public-private corporate turnaround fund.

To accelerate its business reconstruction, Akebono Brake will also accept an official from the fund as a board director and seek debt waivers from its creditor banks.

The company plans to hold an extraordinary meeting of its shareholders on Sept. 27 to seek approval for the measures.

Akebono Brake will use the new funds on structural reform measures, such as conducting a review of its production systems both at home and abroad.

After its performance deteriorated sharply with a decrease in orders from U.S. automakers, Akebono Brake applied in January for an out-of-court business rehabilitation process known as alternative dispute resolution.

Japan Industrial Solutions was jointly established by parties including the country’s top three commercial banks — MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank — and the government-affiliated Development Bank of Japan.

The value of the debt waiver Akebono Brake plans to seek from creditor banks will total about ¥50 billion, according to sources with knowledge of the matter.

The company hopes to enter debt relief talks with the lenders after explaining its turnaround plan at a meeting with creditors as early as Monday, the sources said. Akebono Brake aims to reach an agreement with the banks by September, according to the sources.

The auto parts maker’s interest-bearing debts currently total over ¥100 billion, hampering its business reconstruction efforts.

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