In 2004, the industrial revitalization Corporation of Japan (IRCJ) was given the task of restructuring Daiei, one of Japan’s largest retailers and the country’s most prominent zombie companies. The IRCJ was a government-sponsored organization that has been funded with 50 billion yen in capital and 10 trillion yen of government-guaranteed funds. Daiei IRCJ presented a unique opportunity to show the effectiveness of the strategy, which would require a restructuring of significa … Read more »

In 2004, the industrial revitalization Corporation of Japan (IRCJ) was given the task of restructuring Daiei, one of Japan’s largest retailers and the country’s most prominent zombie companies. The IRCJ was a government-sponsored organization that has been funded with 50 billion yen in capital and 10 trillion yen of government-guaranteed funds. Daiei presented the IRCJ a unique opportunity would the effectiveness of its restructuring strategy, which require a significant depreciation of Daiei bank debt, significant plant closures and downsizing, and enough new private equity capital to reposition and revitalize Daiei retail activities show . Overcoming these hurdles in a large and visible companies like Daiei would be a major success for the IRCJ. But failure to have far-reaching consequences.
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from
Richard S. Ruback
Source: Harvard Business School
11 pages.
Release Date: 17 November 2008. Prod #: 209060-PDF-ENG
Restructuring of Daiei HBR case solution