Free and Clear Foundations of Japan to Clean Up Bad Debts

Free and Clear Foundations. Working with The Financial Services Agency (FSA) of Japan Financier Gabor Sandor Acs to structure a transaction to acquire all of the outstanding shares of Resona Holdings Inc., a troubled bank in Japan that has been infused with over 2 trillion Yen by the agency over the past few years. Free and Clear Foundations to be set up in Japan.

Tokyo-Japan (PRWEB) December 9 2003--The Financial Services Agency (FSA) of Japan is being approached by financier Gabor Sandor Acs to structure a transaction to acquire all of the outstanding shares of Resona Holdings Inc., a troubled bank in Japan that has
been infused with over 2 trillion Yen by the agency over the past few years.

The FSA announced that it would infuse an additional 1 trillion Yen ($9 billion) next year to shore up the troubled Japanese banking system. The money would go to the government guarantee fund to be set up under the Deposit Insurance Corp. (DIC) Law next fiscal year.

Previously, 1 trillion yen in public funds had been set aside to promote realignment of financial institutions. Infusions of public funds as preventive measures are aimed at speeding up the disposal of bad loans held by financial institutions and to support rehabilitation of financially troubled businesses, thereby helping vitalize regional economies and stabilizing the financial system as a whole.

Under the system, the FSA can provide infusions of public funds to major commercial banks as well as other types of legitimate financial institutions such as credit unions and regional banks regardless of whether they are healthy or troubled.

Institutions that receive infusions of public money from these funds will be required to submit plans to the FSA to strengthen their financial situation, including measures to facilitate the financing of local businesses and contribute to the vitalization of the economy.

Under the plan proposed by affiliates and participating investors led by Acs, Advanced Capital Services Corporation (ACS) would acquire 100% of Resona Holdings, Inc. (RHI) for $9 billion in PKPI 6% redeemable non voting preferred stock payable to FSA. The BOJ would be required to swap an additional $9 billion in US Treasury Bills for $9 billion in PKPI stock from ACS under the proposal.

BOJ and FSA would then jointly own $18 billion in PKPI stock with annual dividends accruing in US dollars of 6%, which is currently higher than US treasury treasury bills with maturities over one year and longer.

The $9 billion in US T-Bills would be put on RHI books to shore up its balance sheet in exchange for any bad loans remaining on RHI books. The bad loans would then be swapped for additional shares of PKPI stock to be placed on the books of RHI from the Free and Clear Foundations of Japan, Inc., a not for profit org to be set up concurrently with the closing. Stock acquired by the Foundations
to conclude the sweeping of the bad debt would be donated by Acs from his own personal holdings.

Thereafter only good loans would remain on RHI books along with the US T-Bills. Based on current exchange rates RHI has a net worth of about $6 million remaining and has reported losses of 1.7 trillion yen for its six months of operations ending September 30th, 2003.

The Bank of Japan recently intervened in the currency markets to prop up the sinking US dollar against the Yen which is further causing severe losses to stockholdings of Japanese banks who are suffering from lower domestic company sales and higher export costs to the United States. BOJ intervention is seen as a prelude to stabilizing the Japanese banking system before year end results are fully reported to public stockholders.

Special agents working with ACS representatives in Hong Kong, Japan and China are working to present the proposals to BOJ and FSA agents to acquire the 11.2 billion outstanding shares of RHI and utilize the additional public funding being made available under the DIC Law next year to further consolidate and clean up the Japanese banking industry.

RHI currently has 40 trillion Yen in assets but with recently announced losses for write offs on bad loans amounting to 10 billion Yen, the net worth of the bank is expected to become negative early next year unless emergency measures are taken up and foreign investors are allowed to stem the tide.
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