The Financial Reconstruction Commission said Friday that it has agreed on a basic accord with a financial consortium led by Ripplewood Holdings LLC of the United States on the sale of the nationalized Long-Term Credit Bank of Japan. The FRC and the consortium will sign a final agreement in January on the group's takeover of the LTCB, the commission said. With the basic agreement, a new LTCB is expected to start full business operations in March as a foreign-owned financial institution. The LTCB collapsed under the weight of heavy nonperforming loans in October 1998 and was placed under temporary state control for its eventual sale to the private sector. In late September this year, the commission gave priority negotiating rights to the consortium, but the basic agreement on the deal has been delayed because of different ideas between the two sides about takeover terms. The FRC had been saying it wanted the sale to be completed by the end of the year. Under the terms of the agreement, the investment group will pay 1 billion yen for the 2.4 billion shares, the commission said. The investment group will also inject 120 billion yen into the LTCB's depleted capital base through the purchase of new common shares to be floated by the LTCB, according to the commission. Under the contract, the government is obliged to pay at least 3.7 trillion yen to LTCB shortly before the date of the LTCB sale in order to cover the losses contained in LTCB's loan portfolio. Following the elimination of the losses, New LTCB Partners will take over the remaining loans in the bank's portfolio, while assuming the obligation to pay depositors and investors in LTCB on demand. The investor group includes Deutsche Bank AG of Germany, ABN-AMRO Bank of the Netherlands, Canada's Bank of Nova Scotia, as well as Mellon Bank, General Electric Capital Corp., Travelers Insurance (Citigroup) and PaineWebber Inc., all of the United States. The FRC is still conducting preliminary negotiations on the sale of two other nationalized banks, Nippon Credit Bank and Kokumin Bank. FRC Chairman Michio Ochi said he is willing to choose a leading candidate to take over the NCB in January or February.