Nagoya Railroad Co. said Friday it will disband three unprofitable subsidiaries in Hong Kong and the United States by the end of March.
The liquidation of Hong Kong Meitetsu Co., California-based real estate company MTK Corp. and Saipan-based Commonwealth Marine Leisure Corp. will incur a loss of some 2.3 billion yen.
Nagoya Railroad said, however, that it has taken a charge against the loss, making it unnecessary for it to revise its group earnings forecasts for the current business year, which ends March 31.
The Hong Kong subsidiary was set up by the Nagoya Railroad group in 1968 to procure products for its group firms in Hong Kong. The subsidiary became unnecessary as local group firms have launched their own merchandise procurement divisions.
MTK's mainstay shop-leasing business has been slumping, while Commonwealth Marine Leisure has been suffering a decline in revenues due to the diversification of leisure.
Nagoya Railroad said early last month that it expects to post a 44.5 percent year-on-year rise in consolidated net profits to 2.5 billion yen in fiscal 2000. Group revenues, nevertheless, are expected to drop 4.8 percent to 810 billion yen.