Japan’s Softbank Corp yesterday announced it has agreed to sponsor the corporate rehabilitation of Japanese PHS operator Willcom Inc, marking the latest phase of its support for the failed mobile operator’s turnaround. Softbank Corp has been actively cooperating with Willcom’s cost-reduction measures for its mobile business since it filed for court-led rehabilitation in February this year, Dow Jones reports. Softbank has yet to determine the expected impact on its earnings of sponsoring Willcom’s rejuvenation, it said.
According to TeleGeography’s GlobalComms Database, Willcom filed for bankruptcy protection in February 2010 with JPY206 billion (USD2.3 billion) in debts. At the time the company also requested aid from the state-backed Enterprise Turnaround Initiative Corp of Japan (ETIC), the country’s third largest cellco by subscribers Softbank, and Japanese private equity firm Advantage Partners. The following month it was announced that Willcom was to be split up, while its backers continued to provide financial aid to revive the company. At the end of 2009 Willcom had 4.3 million subscribers but has been weighed down by heavy debts and has seen a steady decline in its customer base in the wake of fierce competition from NTT DoCoMo, KDDI and Softbank. The company’s current shareholders (Carlyle Group 60%, Kyocera 10%, KDDI 30%) are expected to have their stakes wiped out as the company undergoes a 100% capital reduction. The bankruptcy is believed to be the largest in Japan’s history.