Bondholders threaten takeover of failed Japanese consumer lender

Takefuji went under last September and A&P reached a purchase agreement in April, after being chosen by a court-appointed administrator from a field of bidders that included Cerberus Capital Management, TPG and J Trust. No details have been given as to the purchase price or the amount that A&P plans to invest in the company.

The bondholder action breaks new ground in Japan where, unlike the US, investors tend not to get directly involved in court-led corporate rehabilitations. Usually, restructuring efforts see trustees draw up reorganization plans based on trust they have built up with large creditors. A group of more than 10 institutions, led by Ireland's Burlington Loan Management and US-bsed Marathon Special Opportunities Fund, have filed a case with a local court arguing that Takefuji's trustee, Eiichi Obata, has not behaved in a fair and transparent manner.

Takefuji has about JPY1.5 trillion ($18.6 billion) in debt, most of which is overcharged interest that must be repaid to customers - the product of a legal ruling imposed on all Japanese consumer lenders in 2006. It is also been claimed that Takefuji has about JPY93 billion ($1.15 billion) in outstanding bonds, of which JPY50 billion ($619 million) is US-dollar denominated.

The bondholder group has hired Alvarez & Marsal to assess the value of Takefuji's assets.

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• Topics
• North Asia
• Financials
• Restructuring
• TPG Capital
• Cerberus Capital Management