Japan to Set Up Body for Regional Firm Turnaround

Tokyo, June 19 (Jiji Press)--Japan's parliament on Friday passed
into law a bill to set up an organization to revitalize heavily indebted
small and midsize regional companies.

The new organization, expected to be established in October, is
modeled on now-defunct Industrial Revitalization Corp. of Japan, which
helped the turnaround of supermarket operator Daiei Inc. <8263>, among other
companies.
The new body will assist the reconstruction of small and midsize
firms that have useful management resources but are laden with heavy debts,
by buying loan claims from creditor financial institutions and sending
managers to those companies.
After improving their profit generation capability through
restructuring, the organization will sell them to rehabilitation sponsor
companies.
So-called third-sector firms, which are owned jointly by the public
and private sectors, have been dropped from the list of businesses eligible
for the support of the new business turnaround body, in line with the
demands of the main opposition Democratic Party of Japan.
Finance Minister Kaoru Yosano said at a press conference that he
wants to see the survival of local companies with growth potential, in order
for the revitalization of regional economies.