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Wednesday, September 13, 2000

Columbia Inns, Kyotaru restaurants up for sale

The eateries' Japanese owner is
trying to sell its assets as part of
a bankruptcy reorganization

By Rob Perez

The Japanese company that owns two Columbia Inn and two Kyotaru restaurants on Oahu has placed the eateries on the market in its effort to complete a bankruptcy restructuring, a company official says.

Kyotaru Co. put the restaurants up for sale last week and informed the company's roughly 250 Hawaii employees, according to Terry Oshima, president of Kyotaru USA, which manages the Tokyo-based parent's overseas subsidiaries.

Kyotaru is attempting to sell its assets outside of Japan as part of a bankruptcy reorganization, said Oshima, who works in Hawaii. Kyotaru, saddled with huge debts when the Japanese economy tanked in the early 1990s, filed for bankruptcy protection from creditors in early 1997.

The planned sale of the four Hawaii restaurants has nothing to do with how they are faring, Oshima said. "As a whole, we're doing very well," he said.

Kyotaru owns a Columbia Inn in Kakaako and Kaimuki, plus a Kyotaru restaurant in Waikiki and Waimalu. The company has been in the Hawaii market since 1986.

Oshima wouldn't disclose asking prices or what real estate agent is handling the sale.

But one expert whose company does valuations of businesses said Kyotaru likely will be an anxious seller willing to settle for less than top dollar. Other Japanese companies in recent years have sold their Hawaii properties at deep discounts because of bank pressure to shore up their balance sheets.

Richard Dole, head of Dole Capital LLC, which has done valuations on a variety of businesses, including restaurants, said he wouldn't be surprised if Kyotaru fit the same pattern.

"They probably are motivated to complete a transaction because of the need to raise cash," he said.

With the Hawaii economy showing signs of improvement and with local property values down from several years ago, this likely is a good time to purchase a restaurant, Oshima said.

Kyotaru will consider offers for the individual restaurants or for several or all the properties, Oshima said. The Kakaako and Waikiki restaurants include the fee interest for the land.

The two others are on leasehold property.

Whether the 250 employees keep their jobs will depend on the new owners, Oshima said.

Recent news reports out of Japan said fast-food chain Yoshinoya D & C Co. planned to acquire 67 percent of Kyotaru's shares from Katokichi Co., which has been in charge of Kyotaru's court-administered rehabilitation.

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