[From Chisato Horiuchi in Tokyo, Japan]
Seibu HD has delayed recovery of railroad and hotel usage
Seibu Holdings (HD) will sell Seibu Construction Co., Ltd. (Tokorozawa City, Saitama Prefecture), which handles housing construction under its umbrella. The sale price is estimated to be about 40 billion yen. Due to the spread of working from home and refraining from going out, the recovery of railroad and hotel use is slower than expected. The move to sell non-core businesses and assets is likely to continue.
Seibu Construction Co., Ltd., a subsidiary, handles hotel-related construction and civil engineering work. Although it has secured a surplus with sales of 68.6 billion yen and net income of 2.4 billion yen in the fiscal year ending March 2021, it was judged that the synergistic effect with the main unit is low. It is already bidding for sale, and it seems that construction and housing giants have bid. Seibu HD commented to the Nihon Keizai Shimbun that "Nothing has been decided at this time. We will refrain from answering."
Seibu HD's use of hotels and railroads declined due to the impact of the new coronavirus, and the final consolidated deficit for the fiscal year ended March 31, 2009 was 72.3 billion yen, the largest deficit among major private railway companies. It seems that the final deficit was also in the April-September period of 2009. The outflow of cash on hand continued and the finances deteriorated, and the equity ratio at the end of June was 17%, down from 24% before Corona (ending March 2019).
The medium-term management plan for FY21-23 announced in May stated that it would aggressively sell assets and businesses and aim for financial improvement. Prince Hotels, a subsidiary, has decided to sell some land and buildings and specialize in operations by April 2010. It is expected to sell about 40 facilities in Japan for more than 100 billion yen.
Railroad companies are accelerating the sale of non-core businesses and idle assets as their performance deteriorates significantly due to the impact of Corona. Kintetsu Group Holdings sold eight hotels, including Kyoto, to the US investment fund Blackstone Group in October. Tokyu and Keihin Electric Railway will also sell idle assets. Restructuring movements such as business restructuring have not converged.
