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G-8 venue Seagaia saddled with 120 bil. accumulated loss+.

MIYAZAKI, Japan, June 5 Kyodo

Phoenix Resort Inc., the operator of the Seagaia resort and conference hall facility in Miyazaki Prefecture that will be the venue for July's Group of Eight (G-8) foreign ministerial meeting, has racked up losses of 121.8 billion yen in the seven years since opening in 1993, company officials said Monday.

The company, which was jointly set up in December 1988 by the southwestern Japan prefecture, the Miyazaki municipal office and 11 private companies, posted a pretax loss of 12.8 billion yen for fiscal 1999, which ended March 31, and a net loss of 10.3 billion yen, staying in the red for the seventh consecutive year.

A drop in visitors resulted in revenue falling to 18.5 billion yen, down 3.9% from fiscal 1998.

The company's total long-term and short-term borrowing increased by 10.3 billion yen to 263.9 billion yen, the officials said.

Eitaro Kimoto, president of Phoenix Resort, said the firm aims to post an operating profit in fiscal 2000.

He said it will begin negotiations with creditors after the July 12-13 G-8 meeting, to discuss cancellation of debts and its restructuring plan, which envisions reducing the number of employees by one-third.

The number of visitors to Seagaia facilities, which include hotels, golf courses, a convention hall, zoo, tennis court and pool, fell by 3.6% to 3.02 million in fiscal 1999.

Visitors to "Ocean Paradise," the world's largest all-weather indoor water park with capacity for 10,000 people, dropped by 20% to 780,000, possibly due to a decrease in the number of tourists from other Asian countries.

The company, which is scheduled to merge with hotel management company Phoenix Kokusai Kanko Inc., aims to achieve sales of 18.7 billion yen in fiscal 2000, the officials said.

The financial health of Phoenix Resort has deteriorated since last September, when Dai-Ichi Kangyo Bank and its other main banks stopped extending new loans to the firm.

The Miyazaki prefectural government has established a 6 billion yen fund to support the firm, and the company has applied for aid of 5.8 billion yen.
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Comment:G-8 venue Seagaia saddled with 120 bil. accumulated loss+.
Publication:Japan Weekly Monitor
Geographic Code:9JAPA
Date:Jun 12, 2000
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