UPDATE 1-Advantage Partners picked to buy failed Credia

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TOKYO, April 28 (Reuters) - A company owned by Japanese private equity firm Advantage Partners has been picked to buy failed consumer lender Credia Co, as tough regulation accelerates consolidation among consumer finance firms.

Credia last year became Japan's first publicly listed consumer lender to fold under the new regulations, having amassed about 76 billion yen ($727.9 million) in debt. The company filed for court protection in September and its shares were later delisted.

Under Japanese law, a court-appointed attorney can select a third party to buy and revive companies that have, like Credia, applied for such protection.

Unlisted Kazaka Financial Group Co Ltd, owned by Advantage Partners LLP, was the successful bidder, a Credia spokesman said on Monday.

The conditions of the deal were not immediately clear.

Sources told Reuters on Friday that Kazaka and mid-sized lender Shinsei Bank Ltd (8303.T: Quote, Profile, Research, Stock Buzz) were among the firms bidding for the right to revive Credia.

Consumer lenders have been crippled by new regulation lowering the maximum interest rate they charge. They have also been forced to return past interest charges now considered illegally high.

Like other consumer lenders, Credia was forced to hike reserves to repay overcharged interest. The firm booked a net loss of 21 billon yen for the year to March 2007.

When it filed for court protection, Credia was a relatively small player in Japanese consumer finance, with annual sales of 27 billion yen and a market value of $50 million. (Reporting by Taro Fuse and David Dolan)