Struggling condominium builder Towa Real Estate Development Co. has entered the final phase of talks with Mitsubishi Estate Co. on receiving capital, sources said Tuesday.
The two firms are seeking to reach an agreement on the specifics of the planned investment, including the stake Mitsubishi Estate will get in Towa, the sources said.
The companies will unveil an agreement in a few days, they said.
Towa might ask UFJ Bank, its main bank, to provide financial assistance amounting to several billion yen, they said.
Towa wants to bolster its creditability based on a capital tieup with Mitsubishi Estate, a big-name player in the business community, whereas Mitsubishi Estate is keen on enhancing its exposure in the condominium business for families, they said.
Towa is a major corporate borrower from UFJ Bank, a core bank of UFJ Holdings Inc. The condo builder has received a combined 520 billion yen in financial aid from UFJ and other banks.
The company saw a group net loss of 500 million yen on sales of 51.6 billion yen in the April-September first half of the current business year. The balance of its interest-bearing debts came to 306 billion yen.