Struggling Kanebo Ltd. has decided to seek financial aid totaling more than 100 billion yen from financial institutions and other parties to help finance its restructuring, according to sources.
The decision, made Friday, followed Kanebo's move to spin off its profitable cosmetics division into Cosmetics Inc.
Kanebo is expected to ask for help from 94 financial institutions, and Sumitomo Mitsui Banking Corp. and other creditors are expected to write off debts.
It is negotiating with the government-backed Industrial Revitalization Corp. of Japan and financial institutions to get large-scale aid to finance the restructuring and compensate for slashing its textile operations, according to other sources.
The IRCJ is considering extending the period during which it is legally able to purchase outstanding bank loans to Kanebo by about two months from the original June 9.
The rejuvenation plan focuses on high value-added textile products, the sources said.
In February, Kanebo scrapped a plan to sell its core cosmetics business to Kao Corp., the country's largest manufacturer of household products, and instead sought a government bailout.
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