Japanese automotive components manufacturer Akebono Brake has secured JPY20bn (US$185m) in fresh capital from local corporate turnaround fund Japan Industrial Solutions(JISC), according to local reports.
JISC is controlled by the country’s three largest commercial banks, MUFG Bank, Mizhuo Bank and Sumitomo Mitsui Banking Corporation, and the Japanese government’s Development Bank of Japan.
The Toyota affiliated manufacturer of braking systems has been struggling with mounting debt for some time and posted huge losses in the last financial year, due mainly to declining sales in the US.
The company posted a JPY18.3bn (US$170m) net loss in the financial year ending on 31 March 2019, forcing it to write down assets in the US, Slovakia and Thailand.
Akebono Brake said last week it had agreed to accept a JISC appointed official to its board of directors to oversee a major restructuring programme while the company will reportedly seek waivers from its creditor banks on up to half of its current JPY100bn interest bearing debt to help stave off bankruptcy.
The share price jumped by over 40% last week on news of the rescue package.
The company plans to hold an extraordinary shareholder meeting on 27 September to formally approve these measures.
The new funds will be used to restructure company operations including its manufacturing network at home and abroad.