Urban hit by credit market woes, files for civil rehabilitation

By Caroline Salls

Pittsburgh, Aug. 13 - Urban Corp. filed a petition for civil rehabilitation Wednesday in the Tokyo District Court, according to a company news release.

According to the release, "the panic and credit crunch that hit the global financial market caused by the subprime mortgage crisis in the United States brought the Japanese real estate investment market to a standstill."

As a result, Urban said it has found it difficult to secure new loans and to refinance short-term loans since last year, and the company said it has also encountered difficulties in selling developed properties.

The company said it tried to ally with other companies through capital tie-ups to supplement its credit and procure new funds, but the real estate investment market conditions only worsened and the company was not able to reach agreements with the other companies.

Since the company determined that it could not develop repayment prospects on loans coming due after Aug. 14 or on the management of cash flow to pay bills after that date, Urban said it decided to rebuild itself through civil rehabilitation.

After the company secures supplementary credit from its sponsors, Urban said it will be able to create real estate value and work toward rebuilding its businesses.

Urban had ¥255.832 billion in debt as of July 31, according to the release.

Urban is a Hiroshima, Japan-based real estate company.

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