Troubled Dai-Ichi Hotel to become Hankyu railway subsidiary+.
Dai-Ichi Hotel Ltd., which became virtually bankrupt last May, proposed at a creditors' meeting Friday a rehabilitation plan under which it seeks to survive as a wholly owned subsidiary of railway operator Hankyu Corp.
After obtaining approval from the creditors, Dai-Ichi Hotel is expected to file a formal rehabilitation plan with the Tokyo District Court in June.
Under the rehabilitation scheme proposed to the creditors, Dai-Ichi Hotel plans to liquidate its capital to use it entirely for debt repayment, while receiving 1 billion yen in investment from Hankyu.
It will also call on creditors to waive 105 billion yen of its total debts of 140 billion yen.
The remaining 35 billion yen is planned to be paid back in fiscal 2001, which ends in March 2002.
Hankyu will extend an additional 20 billion yen in loans to Dai-Ichi Hotel to help the repayment.
Dai-Ichi Hotel, which used to be a popular business hotel chain, virtually went under last May when it filed with Tokyo District Court for protection from creditors under the Corporate Rehabilitation Law.
Immediately after the failure was reported, the hotel operator's second largest shareholder Hankyu expressed interest in becoming a sponsor.
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|Publication:||Japan Weekly Monitor|
|Date:||Apr 23, 2001|
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