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3 banks eye 400-500 bil. yen rescue package for Daikyo.

TOKYO, March 7 Kyodo


Three major creditor banks are in the final stage of talks on a 400-500 billion yen rescue package for Daikyo Inc., Japan's largest condominium builder which has been saddled with more than 1 trillion yen in group debts, bank sources said Wednesday.

The package, orchestrated by UFJ Bank, Dai-Ichi Kangyo Bank and Asahi Bank, consists mainly of debt waiver and a debt-for-equity swap, the sources said.

Established in 1964, Daikyo expanded swiftly in the 1970s on the strength of its popular ''Lions Mansion'' condominiums but got trapped through over-extension in the real estate market during the economic bubble years in the late 1980s.

Daikyo sought to restructure in 1997 by hiring an executive of the former Sanwa Bank, now part of the UFJ Bank, to take charge of the company. Daikyo, however, failed to shake off its debts as business remained flat under a depressed real estate market.

The Daikyo management turned the company into independent divisions in January in an attempt to slash the size of its debts, more than half of which is held by its real estate subsidiaries.
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Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Mar 11, 2002
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