Nippon Meat Packers has asked its creditors to increase their commitment and overdraft lines by ¥50bn (US$407m) and ¥30bn respectively.
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The beleaguered company wants to increase its on-hand cash and deposits, in the hope that it will be able to survive the current fall in sales that it has been experiencing following the mislabelling scandal.
Nippon was found to have labelled imported beef as domestic beef in order to qualify for government compensation following the Japanese BSE crisis.
Nippon Meat has used ¥38bn of its ¥50bn credit lines and ¥38.4bn of its ¥40bn overdrafts from its main creditors, who include government-affiliated Norinchukin Bank and Hyakajushi Bank.
Nippon Meat Packers is hoping to somehow increase consumer confidence which is at an all time low. If the company is ever to recover from the scandal it will need to increase sales, which took a 40% dive after the scandal was discovered in August.
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By GlobalDataIn an effort to improve its reputation, the company has set up a task force to promote in-house reform and an ethics committee.
To read more about the financial cost of the scandal click here.
To read a just-food.com feature published today on corruption in the Japanese food industry just-food.com members click here.
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