By Nathan Layne and Taiga Uranaka
TOKYO, Jan 15 (Reuters) - Willcom Inc, a Japanese mobile phone company majority owned by U.S. buyout firm Carlyle , may be bailed out by a government-backed turnaround fund, a person with knowledge of the matter said on Friday.
Softbank Corp, another mobile phone company, and private equity firm Advantage Partners could also invest in Willcom, said the source, who declined to be identified because the information has not been made public.
Willcom has been talking to creditors about rescheduling its debt through a recently introduced process that does not involve the courts.
'We have been in negotiations to reach a conclusion in (the) ADR process,' said Willcom spokesman Shinji Sugiuchi, referring to the procedure, known as 'alternative dispute resolution'.
However, the source said the state-backed Enterprise Turnaround Initiative Corp of Japan was in negotiation with Willcom's banks on the possibility of loans being waived.
Willcom had 69 billion yen ($757 million) of loans and 35 billion yen of outstanding debt in March 2009, according to its financial statements.
The ETIC is also currently considering a bailout of Japan Airlines Corp. Willcom director and senior adviser Kazuo Inamori has agreed to become JAL's new chief executive.
Inamori is also the founder and honorary chairman of electronics firm Kyocera Corp.
Carlyle and electronics maker Kyocera Corp in 2004 bought a 90 percent stake in Willcom from phone operator KDDI for a combined 220 billion yen. KDDI holds 10 percent.
Under a likely restructuring plan, current Willcom shareholders would lose their stakes and the ETIC, Softbank and Advantage Partners would take ownership of the company, the Nikkei newspaper reported on Friday. It also reported the names of potential new investors in Willcom.
The ETIC and Willcom are expected to ask the company's creditors to forgive part of its 93.5 billion yen ($1 billion) debt, the Nikkei also said.
A Softbank spokesman said the report was not based on something it had announced and declined to comment further.
An official at Advantage Partners declined to comment. Officials of the ETIC were not immediately available for comment.
Willcom competes against NTT DoCoMo Inc, KDDI and Softbank in providing fast Internet access via data cards.
Competition increased after Emobile Ltd, a mobile phone unit of Internet access provider eAccess Ltd, entered the market in March 2007.
Willcom also has been under pressure to raise money to develop next-generation mobile wireless Internet access, which enables quick Internet access from laptops.
Willcom had 4.3 million users in December, compared with industry-leader NTT DoCoMo's 55.4 million subscribers, KDDI's 32 million and Softbank's 21.7 million.
($1=91.10 Yen)
(Additional reporting by Junko Fujita; Editing by David Dolan)
((nathan.layne@thomsonreuters.com; +813-6441-1801; Reuters Messaging: nathan.layne.reuters.com@reuters.net)) Keywords: WILLCOM/SOFTBANK (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
TOKYO, Jan 15 (Reuters) - Willcom Inc, a Japanese mobile phone company majority owned by U.S. buyout firm Carlyle , may be bailed out by a government-backed turnaround fund, a person with knowledge of the matter said on Friday.
Softbank Corp, another mobile phone company, and private equity firm Advantage Partners could also invest in Willcom, said the source, who declined to be identified because the information has not been made public.
Willcom has been talking to creditors about rescheduling its debt through a recently introduced process that does not involve the courts.
'We have been in negotiations to reach a conclusion in (the) ADR process,' said Willcom spokesman Shinji Sugiuchi, referring to the procedure, known as 'alternative dispute resolution'.
However, the source said the state-backed Enterprise Turnaround Initiative Corp of Japan was in negotiation with Willcom's banks on the possibility of loans being waived.
Willcom had 69 billion yen ($757 million) of loans and 35 billion yen of outstanding debt in March 2009, according to its financial statements.
The ETIC is also currently considering a bailout of Japan Airlines Corp. Willcom director and senior adviser Kazuo Inamori has agreed to become JAL's new chief executive.
Inamori is also the founder and honorary chairman of electronics firm Kyocera Corp.
Carlyle and electronics maker Kyocera Corp in 2004 bought a 90 percent stake in Willcom from phone operator KDDI for a combined 220 billion yen. KDDI holds 10 percent.
Under a likely restructuring plan, current Willcom shareholders would lose their stakes and the ETIC, Softbank and Advantage Partners would take ownership of the company, the Nikkei newspaper reported on Friday. It also reported the names of potential new investors in Willcom.
The ETIC and Willcom are expected to ask the company's creditors to forgive part of its 93.5 billion yen ($1 billion) debt, the Nikkei also said.
A Softbank spokesman said the report was not based on something it had announced and declined to comment further.
An official at Advantage Partners declined to comment. Officials of the ETIC were not immediately available for comment.
Willcom competes against NTT DoCoMo Inc, KDDI and Softbank in providing fast Internet access via data cards.
Competition increased after Emobile Ltd, a mobile phone unit of Internet access provider eAccess Ltd, entered the market in March 2007.
Willcom also has been under pressure to raise money to develop next-generation mobile wireless Internet access, which enables quick Internet access from laptops.
Willcom had 4.3 million users in December, compared with industry-leader NTT DoCoMo's 55.4 million subscribers, KDDI's 32 million and Softbank's 21.7 million.
($1=91.10 Yen)
(Additional reporting by Junko Fujita; Editing by David Dolan)
((nathan.layne@thomsonreuters.com; +813-6441-1801; Reuters Messaging: nathan.layne.reuters.com@reuters.net)) Keywords: WILLCOM/SOFTBANK (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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