Japan's Sakura Bank Turns to Allies for Lifeline Cash Injection
September 1, 1998 - 0:0
TOKYO - Japan's Sakura Bank Ltd. said Monday it will ask for a 300 billion yen ($2.1 billion) lifeline cash injection from its allies, a sign of the nation's deepening banking crisis. The bank will make an emergency share placement with Toyota Motor Corp. and Mitsui Group Firms, its president Akishige Okada told a news conference. We are envisaging 300 billion yen in capital, Okada said, although he added the final figure was not yet decided.
Trading in the bank's shares was suspended Monday after the Nihon Keizai Shimbun leaked details of the deal. As it was reported it is true that we are consulting about a capital increase with major customers and shareholders such as Mitsui and Co., Mitsui Fudosan and Toyota Motor, Okada said. The bank will also speed up its disposal of bad loans and sharply cut back its business in Europe and the United States, he added.
We are hoping for a comeback in credit ratings to a single `A' figure, he said. U.S. credit ratings agency Moody's investors service now rates Sakura's long-term debt two notches below a grade, at medium grade BAA2. He said it was unlikely the ordinary and preferential share placement would be completed before September, when the banks announce their half-yearly results. Japan's banks are struggling to handle huge bad loans, mainly to construction and real estate firms, built up during the speculative excesses of the late 1980s bubble economy.
(AFP)
Trading in the bank's shares was suspended Monday after the Nihon Keizai Shimbun leaked details of the deal. As it was reported it is true that we are consulting about a capital increase with major customers and shareholders such as Mitsui and Co., Mitsui Fudosan and Toyota Motor, Okada said. The bank will also speed up its disposal of bad loans and sharply cut back its business in Europe and the United States, he added.
We are hoping for a comeback in credit ratings to a single `A' figure, he said. U.S. credit ratings agency Moody's investors service now rates Sakura's long-term debt two notches below a grade, at medium grade BAA2. He said it was unlikely the ordinary and preferential share placement would be completed before September, when the banks announce their half-yearly results. Japan's banks are struggling to handle huge bad loans, mainly to construction and real estate firms, built up during the speculative excesses of the late 1980s bubble economy.
(AFP)