Splitting off the construction business into a successor company (2003)

Carrying nothing forward but the name

Rehabilitation by corporate split is usually described as a procedure for becoming light by leaving the debt with the old entity. In old Hazama’s case, though, two rounds of financial support preceded the book-value split, and the second required the consent of all forty-six lenders. With legal insolvency a real possibility had any one of them refused, President Yamato Fumiya submitted the plan on the premise of his own departure. That the only path to continuing the construction business was one in which the management doing the carving-out would not remain is where the character of this decision shows.

Nor did the lightened successor grow under its own power. Consolidated sales advanced to ¥237.2bn, then ordinary profit shrank to ¥0.5bn in the year to March 2010, and the year to March 2013 still stopped at ¥197.9bn. That a capital and business alliance with Ando Corporation was concluded in 2003, the same year as the split, and led to a merger a decade later, shows that the split was not the completion of the rehabilitation but preparation for finding a partner. The name “Hazama,” carried since 1889, could be taken up again because that preparation was made in time.