Takenaka lauds Daiei revival plan for 'strong rationale'

Japan Policy & Politics, Jan 21, 2002

TOKYO, Jan. 18 Kyodo

Economics minister Heizo Takenaka on Friday praised troubled supermarket chain Daiei's reconstruction program as having ''strong rationale.''

''Whether a company should be rehabilitated or not should be discussed from the standpoint of whether the company is viable or not,'' Takenaka told a news conference Friday.

''At this stage, I see the reconstruction program as having strong rationale,'' he said.

Earlier in the day, Daiei, whose network stretches from Hokkaido in the north to Okinawa, announced a fresh three-year restructuring program featuring a 420 billion yen bailout package by its three major creditor banks.

The package features a 300 billion yen rescue plan consisting of debt-for-equity swaps and debt-waivers. Under the swap plan, part of Daiei's outstanding loans held by the three would be exchanged for new Daiei preferred shares.

It also contains a proposal the banks retire Daiei preferred shares worth 120 billion yen they bought last year.

The banks -- UFJ Bank, Sumitomo Mitsui Banking Corp. and Fuji Bank, a key component of Mizuho Holdings Inc. -- said they will positively consider complying with the proposals.

''It is commendable that reconstruction programs for companies like Daiei, with public awareness of the importance of its presence, have been devised in this form as a result of the monitoring by financial institutions,'' Takenaka said.

''The market should give high marks'' to the plan, he said.