Good news this time from amongst the woes we keeping hearing about daily from the Japan Real Estate market.
Joint Corporation, one of the larger `emerging` developers that had diversified into a whole wealth of real estate products and services extending from its original base in residential development, received an injection and back up from ORIX officially yesterday. Orix will take a 39% voting stake in the company in the form of JPY 4 billion common stock, plus 6 billion preferred equity, and give a debt commitment line of 20 billion yen to help tidy up their refinancing issues.
The announcement Monday seemed to be already taken up by the market on Friday as the stock jumped 14%, from its 80% discount to the beginning of this year. We heard through the grapevine that Pres. Shoji made a speech to employees that they will NOT be filing for bankruptcy or anything of the sort… big celebrations over the weekend.
Joint Corp`s stock price was well over JPY3000 late last year but had plummeted below 200 yen by Thursday of last week. I would imagine ORIX is going to make a killing on this one…. the game now is, who will get sponsored to recapitalize and who will not. Those with good assets and decent management will be the first to be picked off at these dirt cheap prices, while others will have to wait to be consolidated with the winners or reshuffled by their banks. Let the games begin!