UPDATE 2-Cerberus, Lone Star among bidders for Takefuji-sources

* Bidders for Takefuji likely to offer Y60-80 bln -sources

* First round of bidding to close Dec. 15 -sources

* J.C. Flowers, Elliott Management may also bid -source

(Adds details)

By Junko Fujita

TOKYO, Dec 9 (BestGrowthStock) – U.S. private equity firms Cerberus
Capital Management [CBS.UL], Lone Star[LS.UL] and Fortress Group
(FIG.N: ) are among those planning to bid for failed Japanese
consumer lender Takefuji Corp, three sources said, in a deal that
could be worth as much as $955 million.

The first round of bidding, in which firms are required to
give the size of their offer and their plans for restructuring
Takefuji, will close on Dec. 15, said the sources, who have
direct knowledge of the deal.

Bidders will likely offer between 60 and 80 billion yen
($715-955 million) for the business, the sources said. They asked
not to be named because the process is not public.

Takefuji filed for bankruptcy in September, owing 433 billion
yen, becoming Japan’s largest consumer lender to fail since a
court ruling in 2006 forced the industry to repay borrowers for
excessive interest charges. [ID:nTOE68Q083]

Distressed asset investors, such as Lone Star and Cerberus,
bought a string of Japanese assets in the 1990s when the economy
was in a deep slump, but they have slowed their purchases in
recent years, unable to find attractive investment targets.

J.C. Flowers & Co, the top shareholder of Shinsei Bank
(8303.T: ), and Elliott Management, which operates a loan servicing
business in Japan, may also submit bids, one of the sources said.

Takefuji’s administrators want to make sure potential buyers
are serious about holding onto the business and that they are not
bidding simply out of interest in the firm’s outstanding loans,
the sources said.


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

Aiful Corp (8515.T: ), another consumer lender, last year
sought to reschedule debt repayment through an out of court
process known as “alternative dispute resolution” or ADR.

Takefuji could face claims of as much as 2 trillion yen from
about 2 million customers, a Takefuji lawyer involved in the
bankruptcy filing told reporters when the filing was made. But
that is expected to be largely reduced, the sources said.

The bulk of Takefuji’s corporate borrowing is expected to be
forgiven as part of any deal, they said.

Takefuji’s rivals, including Acom Co (8572.T: ) and Promise Co
(8574.T: ), are also concerned that they will face a run of claims
by borrowers.

Shinsei Bank (8303.T: ) is acting as an adviser on the sale.
(Additional reporting by Taro Fuse; Editing by Joseph Radford
and Nathan Layne)

UPDATE 2-Cerberus, Lone Star among bidders for Takefuji-sources