CSK to conduct 52 bil. yen capital boost amid hefty losses.

TOKYO, Sept. 8 Kyodo

Information services provider CSK Holdings Corp. said Tuesday it will raise its capital by 52 billion yen on Sept. 30 via a debt-equity-swap scheme and other measures to prevent it from reporting a negative net worth amid expected hefty losses.

CSK Holdings said it is expected to incur a one-off loss of some 55 billion yen as a result of the planned sales of shares and loans at its real estate securitization subsidiary, CSK Finance Co.

The losses would cause CSK Holdings to develop a negative net worth of some 30 billion yen, unless the planned capital-enhancing steps were taken, it said.

CSK Holdings will float and sell 16 billion yen in preferred shares and 6 billion yen in warrants to ACA Inc., a Tokyo-based investment company affiliated with trading house Sumitomo Corp.

The measures also call for exchanging 30 billion yen worth of CSK's outstanding debts to four banks for preferred shares, to be held by the lenders.

The company said it intends to focus its resources on its core information services business in the wake of the capital hike.

The capital-enhancing steps will be implemented on Sept. 30 following approval at an extraordinary shareholders meeting to be convened the previous day.

Company President Yoshito Fukuyama, 59, will resign to take the blame for the one-time loss on Sept. 30. Takeshi Nakanishi, a 52-year-old CSK Holdings operating officer, will assume the presidency following Fukuyama's resignation, the company said.

In addition to the steps, the banks will roll over 50 billion yen in outstanding short-term loans to CSK Holdings by converting them into long-term loans, it said.

On the one-off special loss, CSK Holdings revised downward its consolidated net loss projection for the April to September first half of fiscal 2009 to 57 billion yen from its original estimate of 2 billion yen.