Kaigin To Embark On Corporate Recovery (Ryukyu Shimpo)

Oct 1st, 2004

The Okinawa Kaiho Bank Ltd. (Kaigin) president Mr. Naritatsu Kadena announced yesterday that the bank established the “Kaiho Corporate Recovery Fund” to assist in revitalization of Okinawa’s regional economy. The purpose of the fund is to revitalize the small and medium enterprises that are suffering from excessive delinquent loan, but have potential for profitability. This is the very first corporate recovery fund establishment by the prefecture’s regional bank.

The fund will be operated by Tokyo’s RISA Partners, the debt collection services will be handled by IR Loan Servicing, Inc. (Tokyo.) The business alliance between the Kaiho bank, RISA and IR Loan Servicing will officially be formed today and the fund will be established this month. Investment capital will be determined per investment initiative; the first initiative scale is anticipated to be 600 to 700 million yen.

The investment targets are those enterprises with enough business foundation and potential for profitability but suffers from excessive delinquent loan and non-performing departments.

Kaigin, RISA Partners and institutions in Okinawa will put up the capital to establish a fund. The fund will buy out the targeted enterprises’ credits and proceed to revitalize their businesses through bad credit disposal, non-performing asset sales, change of personnel, and other such know-how to raise the value of each business. Upon recovery, the credits will be sold back to the financial institutions to make a profit which then will be distributed to the investors.

“Unlike other profit-driven corporate recovery funds, this fund focuses on revitalization of the regional economy,” explains the group.

Corporate recovery funds are being used nationwide to assist in delinquent loan disposals at regional banks. In the case of Kaigin, too, the fund establishment and its combination with the know-how of an outside service provider are aiming for an efficient and effective corporate recovery.