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TOKYO (Jiji Press) — Creditor banks of used car dealer Bigmotor Co. have shown intention of refusing the scandal-hit company’s request for refinancing its ¥9 billion debt falling due in mid-August, it was learned Monday.
According to people familiar with the matter, Bigmotor discussed with the banks ways to raise funds for daily operations on Thursday amid mounting concerns over the adverse effects of the auto repair insurance fraud scandal on its earnings.
Since the scandal came to light, the high-profile used car dealer has been losing customers and seen conclusion of auto loan contracts through Bigmotir outlets by consumer finance firm Jaccs Co. suspended.
Although Bigmotor has more than ¥30 billion in cash and deposits, the banks have concluded that keeping extending loans to the firm is risky, people familiar with the matter said.
From now on, the Tokyo-based company is likely to liquidate asset holdings and inventory to procure necessary funds while being urged by the banks to draw up a business reconstruction plan.
