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Report: Investors Buying Japan Bank

July 1, 1999

TOKYO (AP) _ A group of investors led by U.S.-based Ripplewood Holdings is wrapping up negotiations for the purchase of the Long Term Credit Bank of Japan Ltd., news reports said today.

The bank and Japan’s Financial Reconstruction Commission are expected to approve the sale as early as this month, the Nihon Keizai business daily reported. It quoted sources it did not identify.

LTCB is under state control. The commission is a government body overseeing a cleanup of the nation’s banking industry.

Ripplewood has promised to buy the bank intact, retain its entire work force, and re-list it on the Tokyo stock market, the report said.

The U.S. investment firm would purchase LTCB for an estimated $830 million to $1.65 billion, the Nihon Keizai said.

LTCB, once one of Japan’s premier banks, was nationalized last year after regulators determined it would never recover from a mountain of bad loans.

It was the first time the Japanese government had taken over a bank since World War II.

Much of LTCB’s bad debt was the result of aggressive lending to real estate developers before property prices in Japan burst in the early 1990s.

Ichiro Murakami, a spokesman for the bank in Tokyo, would acknowledge only that negotiations were under way with four of five companies interested in buying the bank.

``For reasons of confidentiality, we can’t say anymore than that right now,″ he said.

Officials from the FRC declined comment on the reported buyout, and officials at Ripplewood could not be reached for comment.

Other parties that reportedly have expressed interest in buying LTCB include Chuo Trust and Banking Co. and Mitsui Trust and Banking Co., both of Japan, and J.P. Morgan and Co. of the United States, Kyodo News agency reported.

Ripplewood, which began a detailed examination of the bank’s assets in mid-June, has begun selecting executives to run the bank, the Nihon Keizai report said.

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