JTB, a major travel agency, has been found to make a significant capital reduction, reducing its capital of approximately 2.3 billion yen to 100 million yen, while its business performance deteriorates due to the effects of the new coronavirus.
It seems that the aim is to improve the soundness of the financial base and reduce the tax burden.
At the general meeting of shareholders held on the 12th of this month, JTB decided to reduce the capital of 2,304 million yen to 100 million yen, which will be implemented at the end of next month.
Regarding the purpose of the significant capital reduction, JTB says, "It is to improve the soundness of the financial base, which is deteriorating due to the impact of a large drop in travel demand due to the spread of the new coronavirus infection."
JTB has announced that it will record a record deficit of 100 billion yen in ordinary income for the group's overall performance for the past year, and has a total of 6,500 employees in Japan and overseas to rebuild its management. It shows plans to reduce the number of stores and to consolidate 115 stores in Japan.
Companies are considered to be small and medium-sized enterprises when their capital is 100 million yen or less, and they can receive tax incentives. Therefore, it seems that this significant capital reduction is also aimed at receiving such measures.