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Bus company merger called off amid dispute over assets

Date Posted: 2003-05-03

The merger of Okinawa's four largest bus companies, a plan in the works for nearly ten years, has been called off once again. The new company formed to take over the properties and operations of the existing companies will be dissolved. The final nail in the plan's coffin was Okinawa Bus Co. President Yoshikuni Nakayama's refusal to accept the offered compensation for his company's assets. He claimed that the offered money was not even enough to cover the company's pension liabilities, and thus impossible for him to accept the deal.

"The plan would mean that our company's share from the sale of the assets would be only 500 million; that is far below what we have to pay to our retirees, as our retirement liabilities exceed 2.6 billion," Nakayama said.

The new company president, Yoshio Higa, had set the deadline for the old bus companies to accept the deal by Apr. 28, and had declared that if everyone did not agree by then, the new company would call the deal off and dissolve itself.

The new company, backed by some of Okinawa's largest corporations, had already set the budget for buying the old bus companies assets at 10.4 billion. After much wrangling the backers had agreed to add another 3.6 billion to the compensation package. In the end even that was not enough to satisfy the old companies' management, which insisted that their assets were worth more.

Currently, two of Okinawa's largest bus companies are operating in bankruptcy, and all four are losing money. And while almost everyone agrees that without merging the four companies there is very little possibility that they will be able to return to profitability, the solution to the problem has proven to be elusive.

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