Fujiya to sell assets, seek Resona help over expected loss

Confectioner Fujiya Co. will sell part of its assets, including its headquarters building and real estate in Tokyo's upscale Ginza district, to weather financial difficulties amid the scandal over its use of out-of-date ingredients in its cake products, according to sources.

Fujiya President Yasufumi Sakurai has meanwhile said the company will book a large loss in closing its books for fiscal 2006 to March 31 and that it has asked its main bank, Resona Bank, to come to its financial aid.

Resona Bank has indicated its willingness to comply with the company's request for additional loans, the sources said.

Sakurai made the remarks Wednesday after recent revelations about ingredients beyond their use-by dates being used in cakes forced temporary closures of Fujiya's retail outlets, raising the specter that it will have to make large payments to compensate for losses at those outlets.

Earlier, Fujiya projected that its group net profit in the business year will come to 800 million yen in a positive turnaround from the preceding business year's net loss of 1.8 billion yen.

He told a news conference, "Our task is to find out whether we will be able to straighten out our company single-handedly, while scrutinizing the state of our financial leeway."

Industry analysts say the sale of the company headquarters building and real estate could fetch around 20 billion yen.

Regarding the timing of resuming sales of Fujiya cakes, some members of an eight-member panel of experts selected from outside the company have urged it to refrain from hastily resuming sales.

The members made the proposal when the panel -- set up earlier this month after the scandal broke to recommend measures to revive consumer trust in the firm -- convened the second of a series of meetings Wednesday.

The committee, chaired by Kazuaki Tanaka, professor of political economy at Takushoku University, comprises experts including lawyer Hideaki Kubori and novelist Michiko Yoshinaga.