Copyright 2000 The Financial Times Limited
Financial Times (London)
June
20, 2000, Tuesday London Edition 1
HEADLINE:
COMPANIES & FINANCE: ASIA-PACIFIC: Nihon files for
bankruptcy
BYLINE:
By GILLIAN TETT
Nihon Building Project, a former borrower of Long-Term Credit Bank, has filed for
bankruptcy
with Y560bn (Dollars 5.26bn) of liabilities, Teikoku data bank, a credit research agency, said yesterday.
The collapse marks the second largest
bankruptcy
seen so far this year in Japan, and the latest of a series of
bankruptcies
related to LTCB, which was recently renamed "Shinsei".
Shinsei yesterday refused to comment on its relationship with Nihon Building.
However, it is understood to have passed its loans on to the government when it was recently sold to Ripplewood, the private equity group, after being nationalised in 1998.
The loan transfer occurred because the Japanese government had agreed to take all the clearly bad loans out of Shinsei's loans book before sale.
This means that the government will have to bear the losses from Nihon Building's collapse.
It is unclear what level of assets Nihon Building has.
Shinsei yesterday said it did not have credit exposure to Nihon Building - which used to manage office building, golf courses and hotel construction - any more.
However, the collapse of Nihon Building is likely to fuel concern about the degree of additional bad loan problems that still exist in Japan's banking system.
Before its collapse yesterday, the company was relatively unknown in Japan, since it was unlisted, and few observers realised it was carrying this scale of debt.