Mitsubishi Tokyo Financial Group Inc. will spend more than 100 billion yen next month to raise its stake in consumer financing firm Acom Co. to over 15 percent from the current 2.2 percent, MTFG officials said Thursday.
As a result, Acom will come under MTFG's control and be consolidated on its books, the officials said.
The move is aimed at complementing the operations of Tokyo-Mitsubishi Cash One Ltd., a struggling consumer finance unit set up jointly with Acom and others in March 2002, and thus to better cope with intensifying competition in the consumer loan market by strengthening the alliance with Acom, they said.
The business alliance is also necessary for Acom, as its performance has been hit by increasing individual bankruptcies, they said.
Having Acom under its wing, MTFG also hopes to expand its customer base in retail banking operations, they said.
MTFG plans to purchase all new shares to be issued by Acom in a third-party allotment, the officials said, adding that the investment could amount to 130 billion yen.
Meanwhile, Tokyo-Mitsubishi Cash One will reduce capital to make up for more than 10 billion yen in accumulated losses, while MTFG will buy new shares worth some 10 billion yen to be issued by the finance unit to bolster its capital, the officials said.