Troubled consumer lender Aiful Corp. plans to sell its subsidiary business-loan lender Businext Corp., with Tokyo Star Bank Ltd. strongly considered a prospective buyer, sources said Friday.
Along with the sale, Aiful expects to cut several hundred million yen in costs by pulling its TV commercials and additionally shutting down some 30 unmanned outlets in northern and central Japan as part of its revival efforts, they said.
Businext, lender for sole proprietors and small to midsize firms, was set up in 2001 with Aiful investing 60 percent of the capital and Sumitomo Trust & Banking Co. funding the rest. Sumitomo Trust has agreed to the planned sale, the sources said.
Aiful has been trying to revive itself under the so-called alternative debt-resolution procedure since last year and restructuring its business under a rehabilitation plan agreed with its 65 creditors, including Sumitomo Trust.
The consumer lending business has became harsher as an increasing number of borrowers began claiming refunds of excessive interest charges following a Supreme Court ruling in January 2006 that invalidated any "gray area" interest charges beyond the interest rate restriction law.
The money-lending business law, revised in 2006, also hurt the industry as it tightened lending conditions
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