Aiful reschedules debt
By David Dolan |
December 25, 2009, Friday
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Print Edition
Print Edition
JAPANESE consumer finance firm Aiful Corp said yesterday it had won the backing of all its creditors to reschedule debt payments, giving a critical boost to its restructuring plans.
An Aiful spokesman said all of its creditors agreed to a delay on repayments of 280 billion yen (US$3.1 billion) in debt, winning the unanimous consent necessary for the debt rescheduling.
Ratings agency Standard & Poor's said in September that failure to reschedule the debt could raise the possibility of bankruptcy for the firm.
Aiful, like other Japanese moneylenders, has been hit hard by a 2006 law cutting the maximum interest on consumer loans. The law, which goes into full effect in June 2010, also limits the total amount customers can borrow.
A Japanese Supreme Court ruling has also forced moneylenders to repay prior interest charges that now exceed the legal limit.
Aiful applied in September for the debt reprieve through a recently introduced negotiation procedure known as "alternative dispute resolution" or ADR.
It met three times with creditors to discuss its turnaround plan, with creditors voting on it at yesterday's meeting.
One of Aiful's creditors, a non-Japanese financial firm, had threatened to block the debt rescheduling if it was not compensated for outstanding loans, the Nikkei newspaper reported this month.
Struggling flagship carrier Japan Airlines also applied for ADR in November.
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