Struggling condominium rental agency Leopalace21 Corp. noticed its money owed exceed belongings by about ¥10 billion on the finish of June, it was realized Saturday.
The destructive web value is because of falling occupancy charges for its flats, reflecting a scandal over shoddy development that got here to mild in 2018, sources conversant in the matter mentioned.
The corporate is anticipated to unveil the surplus debt when it releases its April-June earnings on Wednesday, the sources mentioned.
Leopalace21 is believed to have sufficient funds to maintain working for some time. As of the tip of March, it had about ¥60 billion in money and deposits.
However the firm might discover it tough to tackle recent financial institution loans if it fails to resolve the destructive web value quickly, the sources mentioned.
Though Leopalace21 is taking restructuring measures, similar to in search of the voluntary retirement of about 1,000 staff, a swift restoration seems tough, making it obligatory for the agency to discover a sponsor to assist its enterprise reconstruction as quickly as attainable.
Leopalace21 incurred a bunch web lack of ¥80.2 billion in fiscal 2019, which resulted in March this yr, staying within the pink for the second straight yr. The corporate expects to stay within the pink within the present yr.