RNS Number : 0446E
Takefuji Corporation
14 December 2009
Announcement of Extraordinary Loss
Resulting from a Sale of Restructured Loans
TAKEFUJI CORPORATION (the "Company") announces that, on December 11, 2009, the board of directors resolved to enter into an agreement with a third party to dispose of a portfolio of restructured loans (the "Restructured Loans") and, to record extraordinary loss resulting from the performance of its obligations under such agreement.
Details
1. Outline of the transaction and the resultant extraordinary loss
Under a difficult funding environment, the Company has been working to obtain funds through the sale and liquidation of certain assets. As a part of the effort, the Company has decided to sell certain restructured loans (direct cash loans to customers and installment receivables the terms of which were previously amended in favor of the customers (e.g., reduction of interest rates), in order to aid in the rehabilitation of the customers' business or life). For the financial reporting purposes, the Restructured Loans have been disclosed in the category of delinquent loans receivable, along with loans to bankrupt borrowers and certain delinquent loans. The outline of the transaction and the extraordinary loss resulting from the transaction is as follows:
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Buyer
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Corporate name
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Kawa 1 godo kaisha ("Kawa 1")
(corporate name is planned to be changed to Takefuji Trust godo kaisha)
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Location
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12-3 Minami Azabu 2-chome, Minato-ku, Tokyo
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Business description
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Acquisition, holding, management and disposition of investment assets including money receivables
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Relationship
with the Company
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Capital tie or personnel tie: none
Business relationship: Please refer to "Management
and collection of the
loans transferred" below.
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Book value of the loans
to be transferred
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JPY38,092 million
(against which JPY14,785 million of allowance for credit losses has been provided)
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Transfer price
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JPY14,500 million
The Company will deposit JPY2,500 million with Kawa 1 to secure obligations of the Company under a separate contract (the "Obligations") to provide certain services to Kawa 1 in relation to the collection of the transferred loans. Unless certain events happen, the deposit will be released to the Company in twelve equal monthly installments from January 2010 to December 2010, subject to offset against the outstanding Obligations, if any.
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Date of agreement
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December 11, 2009
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Planned date of transfer
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December 14, 2009
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Extraordinary loss stemmed from transfer
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JPY8,807 million
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Management and collection
of the loans transferred
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Certain activities relating to the management and
collection of the transferred loans will
be undertaken by TAKEFUJI CORPORATION subsequent to the sale, pursuant to the agreement concerning management and collection of loans receivable dated as of December 11, 2009, entered into between the purchaser and the Company.
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2. Effect on full-year operating results
Although the Company records an extraordinary loss of 8.8 billion yen from the sale of the restructured loans, neither the forecast for the consolidated full year operating results for the fiscal year ending March 31, 2010 announced on November 5, 2009 nor the forecast for non-consolidated full year operating results for the fiscal year ending March 31, 2010 announced on May 14, 2009 will be revised, taking such factors into consideration as the extraordinary profit of 3.3 billion yen expected from the acquisition and cancellation of Takefuji Corporation JPY70,000,000,000 1.5 per cent. Convertible Bonds due 2018 announced on December 9, 2009 and profits from the sale of a part of underutilized real estate and the financial status of the Company including the results for the first six months, which exceeded the Company's original forecast announced at the beginning of the fiscal year.
This information is provided by RNS
The company news service from the London Stock Exchange
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