Nissho Iwai Corp. and Nichimen Corp. merged under a new holding company Tuesday in a bid to rebuild their struggling businesses.
Nissho Iwai-Nichimen Holdings Corp., capitalized at 10 billion yen, also listed its shares on the Tokyo Stock Exchange and the Osaka Securities Exchange on Tuesday.
Nissho Iwai President Hidetoshi Nishimura became president of the holding company while Nichimen President Toru Hambayashi became chairman. Both will act as chief executive officers.
By accelerating restructuring efforts, the new firm is aiming for a group pretax profit of 101 billion yen by fiscal 2005.
The holding company is targeting a consolidated net profit of 70 billion yen for the business year that ends March 31, 2006, compared with the two firms' estimated combined net losses of 111 billion yen for this fiscal year.
Interest-bearing debts are expected to shrink to 2.06 trillion yen by the end of fiscal 2005 from a combined debt of 2.4 trillion yen projected by the end of this business year, according to the merger plan.
The struggling trading firms signed the merger agreement in January. The companies have been battered by excessive investment during the speculative bubble economy era in the 1980s to early 1990s.
The merger was approved by their shareholders in February.
