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Troubled consumer credit company seeks partner

Date Posted: 2008-06-26

Plagued by overwhelming debts caused by having to refund loan interest payments to customers, Okinawa’s largest consumer credit company, OCS, says it’s turning to the mainland for assistance.

OCS, which reports total liabilities of ¥3.5 billion and additional accumulated debts in excess of ¥1.7 billion, says it is seeking a business linkage with A-Plus, a large consumer credit company. If the plan works, OCS will keep its name and continue local operations.

OCS debt roared out of control after being ordered to refund interest on loan payments to consumers after a law regulating permissible interest payments was restricted to a maximum of 18%, leaving OCS reimbursing hundreds of customers who had been overcharged. OCS say’s there are no worries for consumers or agencies doing business with it.

The Bank of the Ryukyus, OCS’s largest creditor, and other banks are negotiating a forgiveness plan with OCS on parts of the loans. Bank of the Ryukyus and A-Plus will become the biggest shareholders in the new company setup, with six other Okinawa banks investing more than ¥5.1 billion in new capital. OCS’s current capital total’s ¥439 million, and 99% of that amount will be retired. The president and directors of the new company will be drawn from A-Plus.

OCS wants to reduce its loans to ¥20 billion, while working to dissolve the excess debt. OCS says the company name will remain under the new structure. The current president and directors will resign, but all workers will be rehired as employees of the new company.

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