Scandal-tainted confectioner Fujiya Co. said Tuesday it expects to post a group net loss of 6.7 billion yen for the business year ending this month, reversing its initial forecast of an 800 million yen net profit, due to food safety problems that forced it to shut down production.

To make up for the losses, Fujiya will sell its headquarters office in Tokyo's Ginza district to a real estate investment fund affiliated with Citigroup Inc. for 13.5 billion yen. The confectioner will also scrap retirement allowances for its executives worth another 141 million yen.

Fujiya also said it expects to post a pretax loss of 7.2 billion yen, down from the 1 billion yen profit it forecast in November, on sales of 63.3 billion yen, down from its November forecast of 85 billion yen.

In business 2005, the sweets maker posted a net loss of 1.8 billion yen on sales of 84.8 billion yen.

In January, Fujiya confessed it has been using expired eggs, milk and other ingredients to make its sweets after media reports revealed the misuse. Since then, Fujiya has been trying to rebuild itself, replacing its president and agreeing to a business tieup with Yamazaki Baking Co.

Fujiya resumed production of chocolates and other sweets earlier this month. The confectioneries are expected to return to store shelves around Mar. 27.

The damage caused by the food safety scandal amounted to about 14 billion yen, including 6.7 billion yen for disposing of ingredients and 2.2 billion yen in compensation for franchised stores, Fujiya said in a statement.

"Since we are expecting a huge amount of loss this business year, we are sorry to say that we cannot pay any dividend," the statement said. Fujiya had planned to pay 3 yen per share.