The Industrial Revitalization Corp. of Japan has shortlisted seven of 13 candidates to sponsor the rehabilitation of struggling retail giant Daiei Inc., industry sources said Wednesday.

IRCJ will make a final decision to support the rehabilitation of Daiei on Dec. 28, and will decide on two or three sponsors through bidding in mid-January. The final candidate will be named by March, they said.

The seven candidates are supermarket store chains Ito-Yokado Co. and Aeon Co., U.S. retailer Wal-Mart Stores Inc., trading firm Marubeni Corp., turnaround specialist Kiacon Corp., U.S. grain trader Cargill Inc. and investment fund Advantage Partners Inc., according to the sources.

Wal-Mart, however, is considering withdrawing from the bidding due to its discontent with IRCJ's planned investment in Daiei, they said. Wal-Mart teamed up with trading house Sumitomo Corp. to create a Daiei turnaround proposal.

Ito-Yokado has linked up with trading house Mitsui & Co. and Aeon with Kyocera Corp., a diversified technology firm.

Marubeni has formed an alliance with U.S. investor Ripplewood LLC, Mitsubishi Estate Co. and Culture Convenience Club Co., which runs Tsutaya, Japan's largest video rental chain.