Failures by Japan listed firms mark post-war high
TOKYO (Reuters) - The number of Japanese listed firms folding so far this year marked an annual post-war record, data showed on Monday, with property and construction firms bearing the brunt of the fallout from the global financial crisis.
Overall corporate bankruptcies rose 5.3 percent to 1,277 cases in November from a year earlier, with the vast majority of firms going under on slumping sales as the nation's deepening recession takes it toll, research firm Tokyo Shoko said.
In November, builder Oriental Shiraishi Corp, property developer Morimoto Co Ltd and condominium developer Dix Kuroki Co Ltd went under bringing the year-to-date tally for listed firms to 30.
That tops the annual post-war record of 29 logged in 2002, when major banks offloaded large amounts of bad loans.
Of the 30 failures, 23 were property and construction companies.
Hit by the global financial crisis, the Japanese economy is expected to have contracted 0.2 percent in the July-September quarter, in revised GDP data due out on Tuesday.
That follows a 0.9 contraction for the second quarter, which was the sharpest fall in seven years.
Tight lending in the wake of global credit turmoil also continued to hurt many struggling companies, with the number of failures due to lack of operating funds rising 37 percent in November to 81 cases from a year earlier.
"That suggests financial institutions have not relaxed their lending attitude toward small- and mid-sized companies, which are at high risk of bankruptcy," Tokyo Shoko said.
Total debt involved rose 16.9 percent to 576 billion yen ($6.2 billion) but it fell 42.8 percent from last month, when mid-sized insurer Yamato Life Insurance Co and real estate investment trust New City Residence Investment Corp failed.
Tokyo Shoko said the number of bankruptcies may decline around the year-end due to the impact of Japan's economic stimulus measures.
"But unless companies can improve their basic management skills and secure stable operating funds, this would end up as only a temporary fix and they will suffer from a shortage of funds and mounting debt," the research firm said.
(Reporting by Taiga Uranaka; Editing by Edwina Gibbs)
