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GE Capital May Buy Japan Leasing

November 29, 1998

TOKYO (AP) _ U.S. financial services giant GE Capital Corp. is in negotiations to acquire a failed affiliate of Japan’s recently nationalized Long-Term Credit Bank of Japan, a newspaper said Sunday.

Connecticut-based GE Capital is considering buying Japan Leasing Corp. for about $7.4 billion, Japan’s respected Nihon Keizai business daily reported.

If the deal materializes, it will be the most expensive Japanese company acquisition ever, the paper said.

GE Capital, a subsidiary of General Electric Co., would acquire only the healthy leasing operations of Japan Leasing, while the company’s bad real estate assets would be disposed of in bankruptcy proceedings, the paper said.

Company officials were not available for comment over the weekend.

Under the deal GE Capital would also take over the healthy business of Japan Leasing’s car leasing subsidiary, Japan Leasing Auto Corp., the Nihon Keizai said.

Japan Leasing declared bankruptcy in September with debts of more than $16 billion. It was Japan’s biggest corporate collapse since the end of World War II.

Japan Leasing, a leasing agent for computers, aircraft and other equipment, was crushed under massive soured debts incurred from reckless real estate speculation during Japan’s ``bubble″ economy of the 1980′s.

In October, the government nationalized Japan Leasing’s parent company, the debt-ridden LTCB, as part of efforts to ensure stability in Japan’s troubled banking system.

GE Capital has assets of more than $250 billion and is one of GE’s biggest money-makers.

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