Daiei exec
confirms Ala Moana
may be sold

The center's Japanese
owner is restructuring
$22 billion of debt

From staff and wire reports

A top financial official at Japan's Daiei Inc. has confirmed that the company may selling Hawaii's biggest shopping mall, Ala Moana Center.

Kenji Mizuno, manager of Daiei's finance planning office in Tokyo, said in an interview with the Reuters news service that selling the center is one of a number of options the retailing giant is considering. Daiei is attempting to restructure the equivalent of $22 billion of debt.

Ala Moana Center management had expressed skepticism at earlier reports of a possible sale, saying they were rumors and Daiei had not made a decision.

Dwight Yoshimura, Ala Moana general manager, today reiterated that position. "From our standpoint, no decision has been made," he said. "We're operating the center, business as usual."

Reuters today quoted Mizuno as saying that Ala Moana could be included in Daiei's effort to raise 260 billion yen -- equivalent to nearly $2.2 billion at today's exchange rate of about 119 yen to the dollar -- by selling properties.

The Hawaii property's value has been estimated at between $700 million and $1 billion. It could be sold outright or used as backing to raise money through a stock issue, Mizuno said.

He said no decision has been made. Daiei talked in February about possibly selling a minority stake in Ala Moana though a stock issue and keeping the majority. Daiei is consulting with Goldman Sachs & Co., Merrill Lynch & Co. and other financial firms,Mizuno told Reuters.

Daiei acquired full ownership of the 1.5 million-square-foot center in 1995 when it bought a 40 percent interest owned by Equitable Life Assurance for $410 million. Daiei initially acquired a 60 percent holding in Ala Moana in 1982 when it teamed with Equitable to buy it for $282 million.

Daiei fell into the red last year because of lower retail sales in Japan's economic slump and because of losses from some group restructuring.

The company announced a five-year debt cutting plan in December.