Ailing Japanese mobile operator Willcom has said that Softbank Corp, Advantage Partners and state-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) will pull together to help the operator revive itself, after it filed for bankruptcy…
Ailing Japanese mobile operator Willcom has said that Softbank Corp, Advantage Partners and state-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) will pull together to help the operator revive itself, after it filed for bankruptcy protection last month.
Although Willcom has undergone a 100% capital reduction, the firm will continue to operate its mobile business with money from the three companies.
Softbank will pump Y3b (US$33m) into Willcom, Advantage Partners will invest Y5bn and ETIC will offer a Y12bn credit line.
Advantage Partners and Softbank will then set up a new company which will take over Willcom’s mobile services. The new entity will also share the Willcom’s base stations, helping both Willcom and Softbank cut costs.
Softbank said that its support for Willcom will have little impact on its group earnings and won’t change its operating profit and free cash flow forecasts for the current fiscal.
Willcom filed for bankruptcy protection in February with debts of Y206bn (US$2.3bn).
The company’s current shareholders – private equity dynamo The Carlyle Group (60%), Kyocera (10%) and KDDI (30%) – will have their stakes obliterated once the capital reduction is complete.
The bankruptcy is the largest in Japan’s history.
