TOKYO (AFP) - US investment banks JP Morgan Chase and Morgan Stanley have offered to rescue Japan's financially strapped retailer Daiei Inc., a newspaper report said.
The two banks intend to join another US investment firm, Ripplewood Holdings LLC, which has already announced its intention to help Daiei, said the evening edition of the Nihon Keizai Shimbun, citing sources close to the proposal.
JP Morgan is considering an extension of fresh loans to Daiei to provide the retailer with the necessary operating funds on condition that Ripplewood buys into the Japanese company, the business daily said.
Morgan Stanley intends to revive Daiei's property operations by offering store space vacated by Daiei in the course of its restructuring to major retailers, it said.
According to Japanese media, three groups of investors had already shown interest in the rehabilitation of Daiei.
One group includes Deutsche Securities, US investment firm Cerberus and Japanese trading house Marubeni, while another one groups Goldman Sachs and US retail giant Wal-Mart Stores.
A third group is led by US investment fund Ripplewood Holdings LLC and Mitsubishi Estate Co.
Daiei plans to solicit offers, possibly on October 18, from select companies to help its rehabilitation.
Daiei's main creditors, including UFJ Bank, Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp., have been pressing Daiei to seek help from a government rehabilitation body and warned they could stop extending finance otherwise.
Daiei, however, said Monday it would not seek help from the state-backed Industrial Revitalisation Corp. of Japan, saying it would seek support from private companies.
Daiei, twice bailed out by its creditor banks, in 2001 and 2002, due to its financial problems following its aggressive expansion moves in the past, had debts totaling 1.07 trillion yen (9.7 billion dollars) as of March 31.