Another Japanese property developer bites the dust
Time is GMT + 8 hours Posted: 26-Aug-2008 22:44 hrs
Tokyo's Bay area. The global credit crunch claimed another victim in Japan's crumbling real estate sector as property developer Sebon Corp. collapsed with debts of 62.1 billion yen (565 million dollars).
The global credit crunch claimed another victim in Japan's crumbling real estate sector as property developer Sebon Corp. collapsed with debts of 62.1 billion yen (565 million dollars).
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Sebon, which filed for bankruptcy protection with the Tokyo District Court late Monday, said in a statement that the financial crisis had resulted in many sales contracts going sour while hampering its access to credit.
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A wholly owned subsidiary, hotel operator Vanilla, also went bust with debts of about 16.4 billion yen.
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"The real estate market has yet to show signs of recovery. Rather the credit crunch for the real estate sector has become more serious recently," the two firms said in a joint statement.
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The number of Japanese real estate firms going bankrupt has increased since the US "subprime" mortgage crisis erupted last year, triggering a global credit crunch and weighing on Japan's economy.
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Property developer Urban Corp. collapsed earlier this month with debts of 2.4 billion dollars due to a slump in the housing market, the biggest bankruptcy so far this year in Japan.
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Although Japan's banks have not been as severely affected by the US-born credit crunch as many of their Western peers, property firms here say they are finding it harder to get funds.
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"We could not secure necessary funds by the end of August and are at risk of failing to make payments (to lenders). We had no choice but to come to this conclusion," the two companies said.
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Sebon, which was launched in 1974, designed, built and maintained houses. Vanilla started three years ago to operate hotels, relying heavily on loans from Sebon.
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Asahi Homes, another Sebon subsidiary, said in a statement that its operations would not be affected by the collapse of Sebon Corp. But the price of shares in Asahi Homes plunged 28 percent to 42 yen on the Jasdaq market. — AFP
