ETIC to Provide Support to Saneikai Medical Association
April 5th, 2012
Enterprise Turnaround Initiative Corporation of JapanThe Enterprise Turnaround Initiative Corporation of Japan (“ETIC”), has decided to provide
support to Saneikai Medical Association under Article 25, Clause 4 of the Enterprise
Turnaround Initiative Corporation of Japan Act (Act 63, of 2009, hereafter “the ETIC Act”),
1. Name of association concerned
Saneikai Medical Association (hereafter “Saneikai”)
2. Name of financial institution jointly applying for rehabilitation support with Saneikai
The Bank of Yokohama, Ltd. (hereafter “Bank of Yokohama”)
3. Outline of business revitalization plan
Please see appendix.
4. Comments from State Ministers in charge of ETIC
Prime Minister, Minister of Internal Affairs, Minister of Finance, Minister of Economy,
Trade and Industry: No opinion expressed
Minister of Health, Labour and Welfare: “I have no objection to the decision to support
Saneikai. However, I ask that after reaching the decision to support, ETIC should
encourage Saneikai to discuss the situation with employees as soon as possible. I also
ask that in advising on and guiding the implementation of the corporate revitalization
plan, ETIC should aim to ensure that Saneikai complies with related laws andregulations, and that the company also provides adequate opportunities for substantive
discussions with the workforce with due consideration of employment stability andother such factors.”
5. Comment from State Minister supervising business activities
Minister of Health, Labour and Welfare: “Although Saneikai is situated in the central
medical services provision area, a region that has an oversupply of hospital beds, I
have no objection to the decision to provide support, because the hospital plays a role

as a designated provider of emergency medical services and a member of the duty
hospital roster.
I ask that in implementing the revitalization plan, due consideration is given to theopinion of the Governor of Kanagawa Prefecture, who is working to ensure that aproper structure exists for the provision of medical services, and that all necessary
medical functions continue to be delivered through a system that has an appropriate
scale in terms of available hospital beds and other such factors.”
6. Debt purchase application period
From Thursday, April 5th, 2012 for receipt by ETIC no later than Thursday, June 7 th,2012.
7. Request for temporary suspension
Under Article 27, Clause 1 of the ETIC Act, financial institutions have been requested
not to recover loans or exercise any other rights they may have as creditors, other thanthose permitted under the business revitalization plan, before the end of the debt
purchase period as per item 6 above.
8. Treatment of trade creditors
The decision by ETIC to provide support involves requesting the waiver of debt only
from financial institutions providing loans to Saneikai. No request for support will bemade with regard to trade debt. Therefore there will be no impact on trade creditors.
9. Basis for decision to support
ETIC’s basis for deciding to provide support is as follows.
(1) Rationale
Saneikai, based in Yamato City, Kanagawa Prefecture, is a medical care company thatmanages medical facilities currently comprising 121 beds. It is mainly focused ontreatment of digestive system disorders and provides treatment mainly in the areas ofinternal medicine and surgery as well as cardiovascular treatment, orthopedics,
urology and artificial dialysis. It is considered to be a business with high value tosociety. In particular, it occupies a leading position in the region in the treatment ofdigestive disorders, including by endoscopy, and by utilizing endoscopy examination todiagnose cancer it can be said to be contribute to the prevention of cancer in theregion. In addition, as a secondary emergency hospital it plays a role in emergency

medical care in Yamato City. ETIC therefore believes that Saneikai makes a large
contribution to the local community. Furthermore, ETIC believes that as the medical
facilities are a valuable resource, located near the train station (within walking distanceof stations on the Tokyu Denentoshi and Odakyu Enoshima Lines in Yamato City,
Kanagawa Prefecture) in the center of Yamato City and maintaining a significant
number of doctors and nurses who are indispensable to the maintenance anddevelopment of medical treatment. If Saneikai became bankrupt and unable to provide
medical treatment there would be major effects on users of the facilities, including inpatients, and considerable impact on the local community.
ETIC therefore believes that there is ample merit in the provision of business
revitalization support to Saneikai and that this would contribute to the stable provisionof medical care to the local community in the region.
There are relatively few cases where a hospital has been revitalized via a voluntaryliquidation and ETIC will provide such a model through this program of support. By
working with local financial institutions to implement business revitalization, ETIC also
aims to contribute to regional expertise in hospital revitalization.
(2) The Role of ETIC
ETICs planned role in this support program is as follows:(1) Act as a coordinator among the financial institutions concerned (for debt purchase)(2) Facilitate the involvement of new financial institutions(3) Supply management personnel
With regard to (1) above, ETIC will reduce excessive interest-bearing debt, by requestingsupport in the form of debt forgiveness from the financial institutions concerned, andimprove the financial position of Sansei. ETIC also intends to effect debt purchases byrequesting such purchases from the financial institutions involved.
With regard to (2), ETIC will provide funding up to a maximum of ¥525 million to stabilize
Sanseikai’s cash flow and ensure its revitalization.
With regard to (3), ETIC will strengthen the management structure by providing
management personnel and enable the recipient to put in place the foundations needed tooperate on a stable basis.
ENDS

Appendix: Outline of the Business Revitalization Plan
Section 1: Overview of the companies receiving support
1.1 Names of companies
Saneikai Medical Association
1.2 Main business
Hospital and clinic operations
1.3 Main medical and nursing care facilities(1) Saneikai Medical Association Chuorinkan Hospital (121 general beds)
4-14-18 Chuorinkan, Yamato City, Kanagawa Prefecture(2) Saneikai Medical Association Chuorinkan-jin Clinic
301 KT Hasegawa Bldg., 4-15-22 Chuorinkan, Yamato City, Kanagawa
Prefecture
1.4 Location of head office
4-14-18 Chuorinkan, Yamato City, Kanagawa Prefecture
1.5 Number of employees
251 (including non full-time employees; as of March 1, 2012)
1.6 Labor union
None
1.7 Financial institutions with whom transacting
The Bank of Yokohama, Ltd.
Credit Guarantee Corporation of Kanagawa-Ken
1.8 Financial overview (as of December 31, 2011)
Income from medical operations: ¥1,956 million
Loss from medical operations: ¥72 million
Total assets: ¥852 million
Net assets: (¥7 million)
Interest-bearing debt: ¥334 million(2) Background and circumstances leading to request for ETIC support
The recipient has suffered a loss of medical income on a number of occasions due to theretirement of doctors, a reduction in the number of beds, and low numbers of hospitalized
patients as a result of policies designed to encourage the discharge of in-patients.
In order to compensate for the above-mentioned medical losses, the recipient has raised
additional loans, notionally for operational purposes such as staff costs. Interest-bearing
debt has expanded due to capital investments such as the building of new facilities and theimprovement of existing ones, and the introduction of new systems.
In view of its circumstances, the recipient entered into consultations with the Bank ofYokohama and decided to draw up a drastic restructuring plan, speedily implement
restructuring and apply to ETIC for revitalization support.
(3) Outline of the Revitalization Plan
1. Basic Policy Regarding the Business Plan
Financial support as explained below will be implemented in the first year of the planand excess debts reduced. In addition, Sanseikai’s medical care capabilities will befurther strengthened through its core expertise in endoscope-based digestive diseasecare. In order to improve cash flow, which deteriorated precipitously due to losses in
the medical business in fiscal Dec. 2011, measures will be taken to improve profitability
and restore operational viability. These include increased acceptance of dialysis
patients (which had previously been reduced), boosting the operation rate indepartments where in-patient numbers are low, and reducing costs by reviewing
expenses currently outsourced.
2. Main Initiatives to Improve Profitability(1) Cost Reductions
Outsourced expenses will be cut.
(2) Capture more in-patients
In order to ensure a stable income base, profitability will be improved, both bywinning more dialysis in- and outpatients, and by strengthening acute care so as tocapture more in-patients in digestive medicine, internal medicine and orthopedics.
3. Request for financial support to involved financial institutions
In order to conserve hospital assets, hospital real estate currently owned by Mr. Kiyama
will be transferred and the recipient absolved from liability to the debt proportional
thereto.
With regard to the ¥512 million in assets held by involved financial institutions after thetransfer, ¥100 million will be forgiven and ¥170 million will be subject to a request foraltered loan conditions, namely a quasi-capital subordinated loan (debt-debt swap).

4. Funding Plans
There is no concern that the recipient will experience a funding shortage, as new
financing will be provided by the involved financial institutions, ETIC and the Bank ofYokohama (to a maximum of ¥625 million), as determined in this revitalization plan.
Section 4. Conformance with standards for support
This business revitalization plan meets ETIC’s standards for support.
1. Main clauses in standards for support
1.1 Possession of effective management resources
Saneikai possesses effective management resources in that it has a sufficient numberof physicians and nurses for the operation of this hospital and its medical facilities arelocated in a highly convenient area.
1.2 Excessive indebtedness
Saneikai carries an excessive amount of debt compared to its revenues. Debt
forgiveness and financial support are essential to the revitalization of Saneikai.
2. Standards relating to decision to support
2.1 Agreement of main creditor
The application by Saneikai was made jointly with main creditor The Bank ofYokohama.
2.2 Standards for productivity improvement
Successful implementation of this business revitalization plan is expected to enable
Saneikai to meet the required standards with respect to productivity.

2.3 Standards for financial soundness
Successful implementation of this business revitalization plan is expected to enable
Saneikai to meet the required standards with respect to financial soundness.
3. Comparison with liquidation value
The value of Saneikai available through implementation of the business revitalization
plan is estimated to be greater than the value available through debt recovery onbankruptcy or civil rehabilitation proceedings.

4. Potential to refinance within three years
Implementation of the business revitalization plan is expected to significantly improve
the financial condition of Saneikai, enabling it to reach an appropriate level offinancial stability for the repayment of debt principal and interest, thereby makingrefinancing highly possible.
5. Connection with structural oversupply
The regions in which the medical facilities operated by Saneikai are located(Kanagawa secondary medical care area name: Central Medical Area) are deemed
to have an oversupply of beds, in that the current total number of beds forrehabilitation and general treatment (4,785) is slightly exceeding the required
number of beds (4,750).
However, Saneikai’s specialist capabilities in digestive disorders, focusing onendoscopes, creates a clear distinction between it and the excessive competition inthis medical region, and because Saneikai will reinforce this specialist area underthe business revitalization plan, the plan has been judged as not hindering theresolution of structural oversupply.
6. Status of consultations with workforce
As the company does not have an employees union it is planned that meetings withemployees will be scheduled promptly after announcement of the decision to provide
support, and opportunities provided to discuss employment conditions and otheraspects of the business revitalization plan.
Section 5: Responsibility of management and governance
1. Responsibility of investors
All current investors in Saneikai will renounce their equity interest claims, and withthe exception of Satoshi Kiyama, will all resign from their positions at Saneikai.
Saneikai will then become a non-equity based medical association, in whichinvestors do not hold any claim to the refunding of their equity interests.
2. Responsibility of management
In order to further strengthen the operational structure of Saneikai, and to ensure thestable execution of the business revitalization plan, with the exception of Chairman

Satoshi Kiyama all current employees, directors and board members of Saneikai will
resign from their positions, and will transfer to a new operational system.

ENDS