Kokudo Corp. and Prince Hotels Inc., members of the Seibu Railway Co. group, each had a negative net worth in fiscal 2004 due to large extraordinary losses, company officials said Tuesday.
The officials said Kokudo's liabilities exceeded assets by 16 billion yen and Prince Hotels' liabilities totaled 900 million yen in excess of its assets.
The negative worths are likely to force the Seibu group to alter its turnaround plans announced in March to have Seibu Railway absorb part of Kokudo and Prince Hotels. Mergers between firms in negative net worth generally are not allowed under the Commercial Code.