Japanese mobile phone service operator Willcom has filed for bankruptcy protection after failing to reach agreement with creditors on the restructuring of the company’s US $2.3 billion debt load. Filed late last week under Japan’s corporate rehabilitation law, the petition ranks as the largest bankruptcy to affect a Japanese telecom carrier. It is expected to wipe out the investment of the Carlyle Group, the U.S.-based private equity firm that, in 2004, paid US $330 million for a 60% controlling stake in what was then the mobile phone unit of KDDI Corp. In all, Carlyle has invested more than $1 billion in twelve Japanese firms that include Willcom, the fourth largest wireless carrier in Japan with 4.3 million customers. Although Willcom’s subscriber base grew from 2.9 million at the time of the Carlyle acquisition to more than 4.6 million in 2007, Willcom has since lost market share to competitors that have lured customers away with less expensive and more advanced service offerings. Observers also say that recent failed efforts on Willcom’s part to attract new investment that would offset Willcom’s ballooning debt load and provide funds needed to develop competitive high-speed wireless Internet services also factored into the company’s decision to seek bankruptcy protection. Brushing off these setbacks, a Carlyle spokesman promised, “we will continue to seek investment opportunities in Japan.”
Register Now As you are not an existing subscriber please register for your free daily legal newsfeed service.Register
If you have any questions about the service please contact firstname.lastname@example.org or call Lexology Customer Services on +44 20 7234 0606.
Japanese wireless carrier declares bankruptcy
If you are interested in submitting an article to Lexology, please contact Andrew Teague at email@example.com.
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of...
“I make an effort to read at least several articles each day and regularly share the particularly relevant or interesting articles with my colleagues. I greatly appreciate the inclusion of the Lexology service by the State Bar of Texas and have recommended that my friends and colleagues join the Corporate Counsel Section of the State Bar in order to obtain this service for themselves.”
Edward J. Willey III
Huawei Technologies (USA)