May 07, 2009

Unison Capital; Cosmos Initia Turnaround via ADR

Major condominium developer Cosmos Initia Co. is attempting to save itself through an ADR (alternative dispute resolution). ADR is an unconventional third-party restructuring process mediated by the Japan Association of Turnaround Professionals (JATP), an ADR institution certified by the government under a special law for industrial revitalization.

Formerly known as Recruit Cosmos Co., Cosmos Initia left the Recruit Co. group in 2005 through a management buyout. Presently, investment fund Unison Capital Inc. holds the leading stake in the company.

With the condo. market in a slump, Cosmos Initia fell into a negative net worth of 52.7 billion yen in fiscal 2008. The company is also saddled with about 200 billion yen in debt. Under the plan, it hopes to slash about half of its debt.

Taking responsibility for the company's current financial situation, Satoshi Shigeta will step down as chairman. The company is also considering cutting payroll and asking Unison for gratuitous transfer of his shares.

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