Kobe Steel Hires Mizuho as Adviser on Real Estate Sale

  • Will accept first bids on Oct. 20, people familiar say
  • Seeking to sell 70% of Shinko, remain shareholder: people

Kobe Steel Ltd. hired Mizuho Securities Co. to advise it on the sale of a real estate unit to raise cash as a scandal over faked data engulfs the embattled steelmaker, people with knowledge of the matter said.

The company will hold the first round of bidding on Oct. 20 to sell more than two thirds of Shinko Real Estate Co., the people said, asking not to be identified because the process is private. Foreign and Japanese funds, property developers and non-real estate firms are interested in bidding for the unit, which has assets of about 90 billion yen ($800 million), the people said.

Revelations this month that Kobe Steel falsified certifications on the strength of its metals for at least a decade have raised questions over whether the company can withstand compensation costs. The U.S. Department of Justice this week requested documents related to the scandal, which may affect companies including Ford Motor Co. and Boeing Co.

Read this QuickTake Q&A on the Kobe Steel data scandal

Japan’s third-largest steelmaker is seeking to sell about 70 percent of its shares in Shinko Real Estate and remain a minority shareholder, the people said. Kobe Steel plans to hold the second round of bidding later this year and close the transaction by March 31, they said. The company could halt the deal process if the situation changes, according to the people.

A Kobe Steel executive said earlier this week that the steelmaker is considering the sale of its real estate unit but that it isn’t linked to its wider problems.

Representatives from Kobe Steel and Mizuho declined to comment on the deal.

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