UPDATE 1-TPG in talks with Japan's Takefuji on fund injection -sources

Mon Dec 12, 2011 2:24am EST

* Takefuji chose A&P Financial as investor in April

* A&P Financial not yet invested money into Takefuji -sources

* TPG was one of original bidders for Takefuji

By Junko Fujita

TOKYO, Dec 12 (Reuters) - Private equity firm TPG Capital LP is in talks with failed Japanese consumer lender Takefuji about a possible injection of funds as the current investor in Takefuji has not made payments for its acquisition, two people with direct knowledge of the matter said.

A Japanese court approved a rehabilitation plan for Takefuji in October that allowed South Korean consumer lender A&P Financial to invest in it, but the Korean firm has been struggling to raise money, the sources said, asking not to be identified because the information is not public.

A&P had planned to inject 28.2 billion yen ($363 million). . Takefuji could in theory face liquidation if it cannot obtain the new cash.

TPG and the administrator for Takefuji both declined to comment.

Takefuji said on Nov. 30 it would move back the planned date for splitting the company into two by one month to Dec. 31, raising speculation that the restructuring plan was not progressing as scheduled.

Takefuji said in July it planned to divide itself into two units, one continuing its lending business with A&P Financial and the other focused on repaying debt to creditors.

Takefuji and other players in the industry, which offers unsecured loans to individuals and small business owners, are struggling to survive after Japanese courts ruled in 2006 that they had charged too much interest and had to repay borrowers.

TPG was one of the original bidders for Takefuji after it failed in September last year.

The amount of debt at Takefuji has ballooned to 1.5 trillion yen since then as it faced claims from customers for repayment of overcharged interest.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.