INCJ To Invest Alps Spinoff

Innovation Network Corporation of Japan (INCJ), a public-private fund, announced that it will invest in the electronic components unit spin-off from Alps Electric Co., a major comprehensive producer of electronic components. Alps will divest a research joint venture with Tohoku University and establish a new company. The new company deals with technology which can potentially be applied to electric cars and smart grids. INCJ initially invested 3 billion yen and will increase its investment to as much as 10 billion yen.

This is the first and long-awaited investment for INCJ, which was founded last July.

ETIC To Provide Support To Senoh

The Enterprise Turnaround Initiative Corporation of Japan (ETIC), a government-backed corporate turnaround body, has announced it will provide support to Senoh Corporation, a specialized manufacturer and seller of gymnastics equipments.

Senoh was established in 1946 and has been well known as a top supplier for competitive indoor sports. But Senoh, as a diversification of a business portfolio, started to develop a construction and installation business without sufficient know-how or structure. This business brought Senoh into the edge of bankruptcy with heavy debts as well as deficits. Senoh consulted with Resona bank, Senoh's main financing bank and agreed to turn to ETIC for restructuring. ETIC, which considered its support to Senoh as stimulating regional economies and contributing to the development of Japanese lifestyles and society, decided to support the indoor sports supplier.

Chinese Automaker BYD To Buy Japanese Die Factory

Chinese carmaker BYD Co. will buy a plant from major Japanese metal die manufacturer Ogihara Co., according to Nikkei. BYD plans to manufacture high-precision metal dies at the plant for use in mass production at its Chinese-owned factories.

Ogihara was once the target for RHJ in 2002, but it turned out that Daiwa SMBC Principal Investment acquired the 46% stake with its proposal of an IPO in 2003. But Daiwa SMBC last year sold the 36% stake to Thai Summit Autoparts Industry Co., Ltd., a major autoparts maker in Thailand.

Daiwa PI in talks with CCC to sell HMV Japan

Daiwa Securities SMBC Principal Investments is in talks with Culture Convenience Club (TSE4756), the operator of Tsutaya DVD&CD rental chain, on a sale of its portfolio company HMV Japan. Daiwa and CCC have reached a basic agreement to negotiate a sale targeted by the end of June. Price and other details are yet to be agreed upon.

Daiwa originally acquired a 100% stake in HMV Japan in 2007 as a divestment deal of the Japan subsidiary from its UK parent. HMV Japan operates 57 stores mainly in the greater Tokyo area with estimated annual sales of JPY 45 billion (USD 500 million).

CCC operates around 850 stores nationwide. CCC aims to bolster its online sales by acquiring HMV, which generates 40% of its sales from online business.

Carlyle Hands Over Kito to Finnish Crane Maker

Carlyle will sell a 22% stake in Japanese crane maker Kito to Finland's leading crane maker Konecranes for over JPY 3 billion (USD 33 million). Carlyle originally invested in Kito through a take-private MBO in 2003. Kito went public again in 2007 and Carlyle sold approximately half of its stake during the IPO process but has been carrying about a 45% stake to date.

Carlyle also intends to sell further shares by applying for Kito's buyback of its own shares which was announced at the same time.

Bank of Japan Doubles a Loan Facility

The Bank of Japan announced that it would keep interest rates at nearly-zero and double a loan facility available to other banks. "Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand," the central bank's statement said.

J-Will Partners to Sell Hotel Kinugawa Gyoen

J-WILL Partners, one of the largest independent investment funds in Japan, will sell Hotel Kinugawa Gyoen to Ooedo Onsen Monogatari according to Nikkei. J-WILL Partners originally invested in the bankrupt hotel in 2006. Hotel Kinugawa Gyoen, located in the Kinugawa Hot Spring area in Tochigi Prefecture, is a relatively large scale resort hotel which can accommodate 1300 people.

Ooedo Onsen Monogatari, known for its hot spring facilities in the Tokyo Bay area, runs more than 10 resort hotels in hot spring areas nationwide.

RHJI to Fully Exit from U-Shin

RHJ International, once one of the most active buyout funds in Japan, has further reduced its investment in Japan by selling all of its remaining stake in autoparts maker U-Shin (TSE 6985). RHJI originally acquired a 20% stake in U-Shin in 2006 with an initial plan to merge U-Shin with Niles, one of its portfolio companies. Unfortunately, the merger plan subsequently fell apart due to a disagreement within U-Shin's management.

RHJI sold its stake in music company Columbia Music Entertainment this January. RHJI still holds four Japanese companies (Asahi-Tec, Niles, Phoenix Resort, and Shaklee) in its portfolio.

Chuo Mitsui Targets Y150bn for Real Estate Fund Business

Chuo Mitsui Trust & Banking Co. plans to start a real estate fund business with the aim of building 150 billion yen in assets under management in five years, according to Nikkei. The Chuo Mitsui Trust Holdings Inc. unit has established a wholly owned subsidiary specializing in investing and managing domestic properties. Chuo Mitsui hopes to attract pension money.

Japan's economy Grows 3.8%, Less Than First Estimate

The Cabinet Office announced that gross domestic product expanded at an annual pace of 3.8% in the October-December quarter; the number was revised down from the 4.6% stated in a preliminary report last month. The GDP deflator fell a record 2.8%.

CSK May Sell Cosmo Sec. To Iwai Sec.

CSK Holdings Corp., is in talks to sell its Cosomo Securities Co. to Iwai Securities for about 16 billion yen ($178 million), according to Nikkei. The information service company is now in the process of restructuring with help from Ant Corporate Advisory Inc., the Tokyo-based investment firm. CSK focuses on core businesses like IT services and now will try to sell its non-core businesses which are represented by Cosmo Securities. If CSK succeeds in this deal, it will take a big load off its shoulders.

Sumitomo Mitsui Banking To Launch Corp Turnaround Unit

Sumitomo Mitsui Banking Corp. will establish a corporate turnaround company, which will spend up to about 30 billion yen to help the bank's midsize clients, according to Nikkei. Previously, banking groups were forbidden to own voting rights of 5% or more in a domestic company. But a legal revision in 2008 made it possible for them to own voting rights of 5% or more in unlisted firms trying to get back on their feet. The core unit of Sumitomo Mitsui Financial Group Inc. will soon set up a wholly owned corporate turnaround company with 100 million yen in capital. The subsidiary will invest in SMBC clients likely to recover in three to five years and that generate sales of 10-100 billion yen or so. The firm is expected to take a 20% or smaller stake in each. If it invests in a listed company, it will hold a stake of less than 5%.