Yaohan Corp., a retailer undergoing court-mandated rehabilitation procedures, said Wednesday that it will repay about 7 billion yen of its debts at the end of February, in many cases two years earlier than planned.
The debts comprise unpaid retirement allowances to former employees and convertible bond-related debts, Yaohan said.
With Japan's prolonged economic slump and the entry of foreign firms into the market heating up competition in the retail industry, Yaohan has decided to advance its rehabilitation program in the belief that it is necessary to return to joint-stock company status earlier than planned.
Yaohan has secured the necessary funds to finance the debt repayment through its accumulated business profits and with financial support from major supermarket chain operator Jusco Co.
The retailer said it is also considering repaying its remaining debts -- which total 15 billion yen -- by February 2002, one year ahead of schedule.
Yaohan has been in the process of corporate rehabilitation with the support of Jusco since September 1997, when it applied for court protection from creditors with about 171.16 billion yen in outstanding debts.
In March 2000, Yaohan announced a three-year rehabilitation program ending in February 2003.
Sales remain below last year's levels, but Yaohan is expected to post operating profits in the fiscal year that ends this month thanks to buying-in and other cost cuts.
A company official said the earlier-than-planned debt repayment will be a step toward the early completion of the rehabilitation program and returning to normal business.
Yaohan, based in Numazu, Shizuoka Prefecture, once actively operated supermarket chains and department stores in Japan and abroad. It has been forced to withdraw from overseas markets and currently only runs outlets in the three prefectures of Shizuoka, Kanagawa and Aichi.