Shinsei Bank will waive 15.3 billion yen of its 43 billion yen in outstanding loans to ailing construction firm Hazama Corp. and then sell the remainder to the debt-ridden company's two main banks, sources close to the negotiations said Wednesday.
Terms for the sale of the loans to Dai-Ichi Kangyo Bank and Mitsubishi Trust & Banking Corp., totaling some 28 billion yen, have yet to be finalized, the sources said.
Shinsei Bank, formerly the Long-Term Credit Bank of Japan, is estimated to have built up a loan-loss reserve of some 20 billion yen for its Hazama loans, and the sale of the 28 billion yen portion is expected to ensure it suffers no further losses.