Mizuho will sell about 100 billion yen ($983 million) worth of loans to U.S. fund Cerberus <CBS.UL> and to Morgan Stanley <MS.N>, the Nikkei business daily reported, with the two U.S. firms potentially becoming the top shareholders in the scandal-hit staffing company.
TOKYO (Reuters) - Japanese staffing firm Goodwill Group Inc <4723.T> said on Tuesday it was in talks with its main bank Mizuho Financial Group <8411.T> about the sale of its debt, some of which may be converted to equity.
Mizuho will sell about 100 billion yen ($983 million) worth of loans to U.S. fund Cerberus <CBS.UL> and to Morgan Stanley <MS.N>, the Nikkei business daily reported, with the two U.S. firms potentially becoming the top shareholders in the scandal-hit staffing company.
A spokeswoman for Mizuho, Masako Shiono, declined to comment.
Shares in Goodwill Group shot up 12.8 percent, or by its daily limit of 3,000 yen, to 26,400 yen, outperforming the Tokyo market's benchmark Nikkei average <.N225>, which was up 0.1 percent by the midday break.
!ADVERTISEMENT!The stock has been among Tokyo's worst performers over the last 12 months, falling more than 70 percent following a series of legal violations by the company.
Goodwill was forced to withdraw from the nursing care business last year after the government refused to renew licenses for most of its service centers because of inflated staff numbers.
In January, it was ordered to shut some of its branches for up to four months, after dispatching temporary staff to jobs they were not legally authorized for.
Cerberus and Morgan Stanley are expected to conduct a debt-equity swap to convert a portion of the loans into common and preferred shares, making them the top shareholders in the company, the Nikkei said.
Mizuho is Goodwill's main banker and had financed much of the expansion of the company, but has decided it is now overexposed, the Nikkei said.
The bank's loans to the staffing company include about 90 billion yen for the group's core unit, Goodwill Inc., and several dozen billion yen to the group's research unit, the paper said.
For the year ended in June 2007, Goodwill Group booked a net loss of 40.7 billion yen, compared with a net profit of 3.4 billion yen a year earlier.
The Nikkei also said on Tuesday that Goodwill Group Chairman Masahiro Origuchi, the company's current top shareholder, and President Shinichiro Kawakami were expected to step down.
Shinichi Horii, who now serves as an outside director on the company's board, will likely take over as president, it said.
($1=101.73 Yen)
(Additional reporting by David Dolan)
(Reporting by Aiko Hayashi)
