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Case History: Nakamura Jozo Co., Ltd.

Nakamura Jozo, headquartered in Fujisaki-cho, Aomori Prefecture, is a soy sauce producer with 140-year history from the late Edo Period. The company's lineup of popular products includes Konbu (a kelp-flavored soy sauce) that enjoys favorable sales in Hokkaido and the richly flavored Kanekame soy sauce, which is a favorite of renowned chef Toshiro Kandagawa. Facing cash flow difficulties created by past capital overinvestment, in January 2006 this long-standing company applied for assistance under the Civil Rehabilitation Law. Even with a new sponsor, the company found it difficult to secure working capital.

The DBJ Initiative

In Nakamura Jozo's case, the Bank provided debtor-in-possession (DIP) financing using the company's inventory of unpasteurized soy sauce as collateral. Although the use of product inventories as collateral is increasing, inventories are typically considered secondary collateral for companies in strong financial condition. However, DBJ accepted the inventory as primary collateral after obtaining an objective assessment of its value. With the support of DBJ's financing, the people involved in the project and the efforts of Nakamura Jozo, the company emerged from civil rehabilitation in November 2006.

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