Japan Appliance Retail Major to Acquire Ailing Scrap Dealer

Tokyo based major ferrous scrap dealer, Azuma Metal filed for court protection under the civil rehabilitation act on Thursday. Japanese major home appliance retailer, Yamada Denki announced on the same day the firm signed agreement to support Azuma Metal.

Azuma Metal’s profitability decreased since collapse of ferrous scrap market price after Lehman Shock. The firm’s operation got severer recently due to limited availability of scrap after the major earthquake along with lower productivity. The firm posted 10.799 billion yen of sales in the year ended May 2008. However, the firm posted 8.179 billion yen of sales with 376 million yen of recurring loss in the year ended May 2011. The firm has excess debt after the firm posted net loss for 3 years in a row through the year to May 2011.

Yamada Denki will acquire all of newly issued shares by Azuma Metal after the authority approves the reorganization plan. Yamada Denki decides the investment depending on additional discussion with interested parties. Yamada Denki seeks new recycling system through acquisition of Azuma Metal.