Consumer lender Takefuji Corp. said Wednesday it wants to raise as much as ¥100 billion in capital to help it weather the industry crisis that has claimed about half of its rivals in the past four years.
Japan's third-largest consumer lender by market value plans to raise the money through loans and selling securities in the current fiscal year, which ends March 31, Takefuji President Akira Kiyokawa said. As much as ¥10 billion may be raised this month in securities sales, he said.
Takefuji has lost ¥723.3 billion during the past three years, more than any other consumer lender in the nation, as a crackdown by authorities on excessive interest rates made it liable to pay refunds. Moody's Investors Service cut its rating for Takefuji on May 28 to the lowest investment grade, Baa3, and put the company on review for a possible downgrade to junk.
More than half of Japan's consumer lenders have gone out of business since the Supreme Court in January 2006 invalidated contracts allowing lenders to charge as much as 29 percent.
"Takefuji's funding profile may pose a challenge to the company's management plans to stabilize its operating results," Moody's said, adding Takefuji has sufficient reserves to cover risks related to interest refund claims.