Daiei Inc., seeking to avoid bankruptcy under more than 2 trillion yen of debt, will be allowed to rehabilitate under the industrial revitalization law if its restructuring plan is approved, the Ministry of Economy, Trade and Industry said Monday.
The law would give the ailing supermarket chain preferential treatment in the form of tax breaks, increased leeway to spin off businesses, the ability to swap portions of its debt for equity, and fresh loans from the governmental Development Bank of Japan.
On a TV program Sunday, Economy, Trade and Industry Minister Takeo Hiranuma said his ministry will fully support Daiei's rehabilitation efforts, including use of the industrial revitalization law, if Daiei applies for it.
The legislation, enacted Aug. 5, 1999, offers tax breaks and other incentives to companies that shed excess facilities and capacity during restructuring. The law will be in force through the end of March 2003.
Daiei is mulling a three-year restructuring plan based on accelerated debt reduction, massive recapitalization and the closure of several dozen unprofitable stores.