Ailing construction firm Kumagai Gumi Co. announced Friday it will ask its main creditor banks for a bailout of 300 billion yen under a new three-year restructuring plan while seeking a merger with Tobishima Corp.
Under the new plan, which covers the period through the end of March 2006, Kumagai Gumi will spin off its money-losing real estate business into a new company Oct. 1 and focus on its still-profitable construction and civil engineering business.
The contractor said it will reduce its capital by 90 percent with no compensation for shareholders, conduct a 1-for-5 reverse stock split and issue 30 billion yen in new preferred shares to creditor banks in a bid to cut losses and bolster its capital base.