Haseko seeks bank debt-equity swap

TOKYO, Japan -- Daiwa Bank said Thursday it will consider "positively" a request from Japanese apartment builder Haseko Corp to convert 150 billion yen ($1.12 billion) in debt for equity.

Daiwa is one of Haseko's three main creditor banks, along with Chuo Mitsui Trust & Banking Co.and Industrial Bank of Japan.

The banks are expected to comply with the request, according to the Nihon Keizai Shimbun business daily.

Haseko's request is part of a revival plan for the troubled mid-sized developer, which is Japan's largest condominium developer.

Under the deal, Haseko plans to trim interest-bearing debt by March 2005 to less than 250 billion yen, from 544.7 billion yen as of last September, a company spokesman said, according to Reuters news agency.

The Nihon Keizai reported that Haseko's debt-for-equity deal would boost the banks' stakes in the company, creating a possible conflict with the government's requirement that banks limit their holdings in non-financial companies to 5 percent or less.

It said Haseko would seek a waiver of the 5 percent rule under a law intended to help corporate restructuring.