Turnaround Body Eyes Launch Of 70 Public-Private Funds

TOKYO (Nikkei)--The government-backed Enterprise Turnaround Initiative Corporation of Japan was relaunched Monday with a new name and focus, setting a goal of creating around 70 public-private funds totaling around 200 billion yen.

The ETIC was tasked with helping large companies get back on their feet, while its successor body, whose English name has not been announced, will focus on supporting ailing small and midsize companies at a more localized level.

"We plan to go a step further with taking risks than before," said Toshio Seya, the ETIC chief who retained that role with the successor body.

The organization will tap 3 billion yen in funds earmarked in the fiscal 2012 supplementary budget to set up new funds in cooperation with regional financial institutions and other entities. It will obtain 1-2% stakes in each fund.

These funds will be classified into two types. A total of 20 will be created nationwide to help individual companies rebuild. Others will provide support to a particular region or group of companies -- inns and other facilities in a hot springs resort community, for example -- and will be set up in each of Japan's 47 prefectures.

The first fund will likely be launched in April or May, according to Seya. To help maximize support, the organization will dispatch turnaround specialists to work directly with struggling firms.

The organization will also have 1 trillion yen set aside for direct lending or investment, up from the 300 billion yen that had been in place at the ETIC. It will keep the names of aid recipients undisclosed to prevent negative rumors that could hurt rehabilitation efforts.

Such efforts come as a law designed to make it easier to revise loan repayment terms for smaller firms nears expiration at month's end. Some 50,000-60,000 businesses are expected to require support after the law expires.

(The Nikkei, March 19 morning edition)

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