SFCG Files for Bankruptcy With 338 Billion Yen Debt (Update1)
By Tak Kumakura and Takahiko Hyuga
Feb. 23 (Bloomberg) --
SFCG Co., a Japanese lender whose creditors include
Citigroup Inc., filed for bankruptcy protection, triggering a slump in financial stocks on concern Japan’s recession will cause more corporate failures.
SFCG, which focuses on lending to small businesses, listed 338 billion yen ($3.6 billion) in liabilities, making it the biggest bankruptcy by a publicly traded Japanese company in almost seven years.
The firm owed Citigroup 71 billion yen as of July 31, according to a filing by SFCG on Oct. 27.
“Up until now, bankruptcies were concentrated in the real estate and construction sectors, but the trend has widened to collapses across a broad range of industries,” said
Nobuo Tomoda, an analyst at credit and bankruptcy research firm Tokyo Shoko Research Ltd. “It’s getting harder to obtain funds.”
Japan’s
economy is set to contract a record 4 percent in the fiscal year starting April 1, according to a Bloomberg survey of analysts, driving up bankruptcies and eroding profit among lenders as bad debts increase. SFCG’s finances deteriorated because of difficulties obtaining credit and collecting on loans, the company said in a statement today.
A record 33 publicly traded companies in Japan declared bankruptcy last year as banks trimmed lending and consumer spending dropped. Urban Corp., a Hiroshima-based developer, filed for protection with 255.8 billion in liabilities on Aug. 13, the biggest failure last year.
Corporate Bankruptcies
Total corporate bankruptcies rose 15.8 percent to 1,360 cases in January, the eighth monthly increase.
“Investors are increasingly wondering which businesses can survive in the coming months,”
Tomochika Kitaoka, a strategist at Tokyo-based Mizuho Securities Co., said in an interview with Bloomberg Television.
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