OSAKA -- Toyo Shutter Co. said Friday it will ask six of its main banks for 12.6 billion yen in financial assistance as part of its new restructuring plan.
The Osaka-based manufacturer of shutters said it will ask the banks, including Dai-Ichi Kangyo Bank and Sumitomo Mitsui Banking Corp., to forgive 11.6 billion yen in debt and to exchange 1 billion yen of debt for stock under a debt-for-equity swap deal.
Toyo Shutter President Akira Uehara and Vice President Kunihiko Maeda will step down from their posts, according to the company, when the restructuring plan begins to proceed smoothly.
Dai-Ichi Kangyo released a statement the same day saying it will help Toyo Shutter restructure.
The bank gave applauded the company's restructuring plan, saying "it seeks to drastically improve its business performance and financial standing."
In line with guidelines for insolvent companies set up by the Japanese Bankers Association and other parties, the company said it plans to reduce its capital and ask for approval of the plan at a shareholders' meeting.
Toyo Shutter posted a loss of around 11.5 billion yen in 1998 due to losses on investment in financial derivatives.
The company had since been trying to restructure but had a negative net worth of 880 million yen at the end of last September because of appraisal losses on its stockholdings.
Under its new restructuring plan, the company will shut down two unprofitable subsidiaries, boost efficiency in the manufacturing area and reduce debt by selling 4.5 billion yen in assets.