The state-run Deposit Insurance Corp. announced Friday it will buy 197.6 billion yen of Shinsei Bank's outstanding loans to troubled department store chain Sogo Co. and waive 97 billion yen of that amount.
The Financial Reconstruction Commission, which oversees the DIC, approved the proposed purchase and partial forgiveness of Sogo's loans at an extraordinary meeting held earlier in the day.
The loans in question were extended by the defunct Long-Term Credit Bank of Japan, which was sold to a private-sector consortium led by U.S.-based Ripplewood Holdings LLC. The bank was renamed Shinsei Bank on June 5.
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