Construction firm Hazama Corp. rejected suggestions Monday that it is considering integrating its management with Sato Kogyo Co. or other companies, or that it is seeking additional financial aid from its creditor banks.
The company issued the statement after news reports suggested Sato Kogyo, which asked the Tokyo District Court to protect its assets from creditors Sunday, is considering management integration with Hazama.
Hazama has strong financial ties with Mizuho Holdings Inc. Sato Kogyo's main bank is Dai-Ichi Kangyo Bank, one of the three component banks of Mizuho Holdings.
"We are not considering integrating our management with that of another company, so we will seek to rebuild our business conditions on our own," the company said. "Although our order environment, such as the public works project shrinkage, is very harsh . . . our situation does not warrant any concern, as our main bank supports us as it has done."
Hazama's reconstruction program is feasible, the contractor said, because it has been devised taking into account the mark-to-market accounting requirement.
The plight of Sato Kogyo has renewed anxieties that major banks may take another blow from booking large losses on outstanding loans to cash-strapped major construction firms, which themselves would fall into a deeper pit if banks decide to cut off loans to them.
The government said Sunday it will act to forestall a chain reaction of company bankruptcies in the wake of Sato Kogyo's decision to file for court protection.
Economy, Trade and Industry Minister Takeo Hiranuma said, "General contractors affect a broad range of firms, including many small and midsize businesses."