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Lone Star to takeover Tokyo Star Bank from Advantage Partners

  • Maya Ando
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Lone Star, the US private equity firm specializing in the distressed investments, will reportedly take ownership of Tokyo Star bank from Tokyo-based private equity firm Advantage Partners (AP) and once again become the bank’s largest shareholder, owning around 33% of the shares.

According to a Reuters report, AP has agreed to give away all its holdings in the troubled bank to a special purpose company founded by lenders, which includes Lone Star, Shinsei Bank and Aozora Bank and Credit Credit Agricole. In return, the special purpose company operated by AP will not need to repay a loan of JPY170 billion borrowed from lenders when it took over 100% of the bank in 2008 through launching a TOB valued at JPY250 billion.

Tokyo Star, which provides loans to individuals and small businesses in Tokyo, has struggled to increase sales and have posted 21 consecutive months of loss mounted totaling JPY 2.8 billion($34.3 million) and as a result AP has failed to service its loan.

Tokyo Star Bank sprung out in 2001, when Lone Star originally bought out bankrupt Tokyo Sowa Bank from the Japanese government for 40 billion yen ($490 million) in February 2001. Lone Star sold the restructured bank under the new brand name to AP in 2008.

 

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