ETIC to Provide Support to Makikai Medical Association
April 12th, 2012
Enterprise Turnaround Initiative Corporation of JapanThe Enterprise Turnaround Initiative Corporation of Japan (“ETIC”), has decided to provide
support to Makikai 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 company concerned
Makikai Medical Association (hereafter “Makikai”)
2. Name of financial institution jointly applying for rehabilitation support with Makikai
The Gunma Bank, Ltd. (hereafter “Gunma Bank”)
3. Outline of business revitalization planPlease 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
Makikai. However, I ask that after reaching the decision to support, ETIC should
encourage Makikai 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 Makikai 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: “Makikai plays an important role as a providerof medical services for cancer, diabetes and emergency care in the Takasaki-Annaka
medical region, which is an area that does not contain excess sickbeds. I thereforehave no objection to the decision to provide support.
I ask that in implementing the revitalization plan, due consideration is given to theopinion of the Governor of Gunma Prefecture, who is working to ensure that a properstructure 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 interms of available hospital beds and other such factors.”
6. Debt purchase application period
From Thursday, April 12th, 2012 for receipt by ETIC no later than Thursday, June 21st,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 Makikai. 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
Makikai is a medical association that operates both the Maki Hospital and theTakasaki PET General Imaging Center (Clinic) (hereafter the "PET Center") in
Takasaki City, Gunma Prefecture.
In addition to its involvement in emergency medical treatment as a secondary
medical emergency facility, the Maki Hospital provides acute care services forgastrointestinal, circulatory diseases, orthopedic disorders and other problems
common with elderly people. In provincial regions, where the local population is aging,these kinds of medical services are essential. In the field of gastrointestinal endoscopy,
the Maki Hospital is one of the leaders in Gunma Prefecture in medical testing andsurgery. The Maki Hospital is one of only two facilities within the prefecture that areauthorized to carry out colorectal ESD (Endoscopic Submucosal Dissection), anadvanced treatment that places very little burden on the patient.
The PET Center is actively promoting preventative medicine in the region throughoutpatient care and advanced health screenings in the city. It has a proven reputationin the field of medical examinations and each year the Center examines over 10,000people. As a clinic for the support of home-care services, the facility provides medicalservices for patients who wish to live at home, and is making a great contribution to
health-care delivery in the region in the areas of preventative care, emergency care,acute-phase care and home care.
If Makikai were no longer able to provide these medical services, it would have aconsiderable impact on in-patients and other facility users, and would have an
immeasurable impact on the local community.
ETIC's revitalization of Makikai will contribute to the stable supply of medical
services in the local community, and we therefore deem that this project is of sufficientsignificance.
Through the support given in this project, ETIC will aim to improve the financial
footing of Makikai. By providing a revitalization model for improving the standard of
medical care and expanding the range of medical functions, ETIC is aiming tocontribute to the continuation and development of systems that will provide medical
services in the region.
(2) The Role of ETICIn this support program, ETIC will play a specific role in (1) coordination of thefinancial and other institutions concerned (including the purchase of debt), and (2) thesending of administrative personnel to Makikai.
With regard to (1), ETIC will ask the financial and other institutions concerned toprovide financial assistance, including debt forgiveness. If necessary, ETIC willpurchase debt or carry out refinancing to reduce the level of excessive interest-bearing
debt, with the objective of improving the financial state of Makikai.
With regard to (2), ETIC will send administrative personnel to Makikai, to enhance
its management structure and form a stable management base within Makikai.
EndsAppendix: Outline of the Business Revitalization PlanSection 1. Overview of the companies receiving support
1.1 Names of companies
Makikai Medical Association
1.2 Main business
Hospital and clinic operations
1.3 Main medical and nursing care facilities(1) Maki Hospital (140 general beds)(2) Takasaki PET General Imaging Center (clinic: 10 beds)
1.4 Location of head office71-1 Tsukunawamachi, Takasaki-shi, Gunma Prefecture
1.5 Number of employees
211 (171 full-time, and 40 non full-time)
1.6 Labor union
None
1.7 Financial institutions with whom transacting
The Gunma Bank, Ltd., others
1.8 Financial overview (as of March 31, 2011)
Interest-bearing debt: ¥2,588 million
Income from medical operations: ¥2,183 million
Profit from medical operations: ¥14 million
Section 2. Background and circumstances leading to request for ETIC support
Makikai was faced with excessive debt due to borrowing they undertook to pay for thebuilding and equipping of the PET Center that opened in 2006. Various administrativeissues remain, including the aging of the Maki Hospital building (which is over 40 yearsold), and concerns over the loss of expert medical personnel.
With the goal of improving their financial footing via ETIC's procedures, and promoting
managerial improvement underlying better medical care, Makikai together with Gunma
Bank applied to ETIC for revitalization support.

Section 3. Outline of the Revitalization Plan
1. Basic policy
Financial assistance will be carried out in the first year of the plan to reduce levels ofexcessive debt.
Makikai will then work to better cater to elderly in the region by strengthening its
emergency patient capacity and offering a full range of acute care services in thegastrointestinal, circulatory and orthopedic fields. By expanding its system of providing
consistent medical services, from the later stages of rehabilitation to treatment atpatients' own homes, Makikai will work to enhance the specialist medical fields that areneeded in this region where the population is aging.
The plan will aim to continue improvements in the field of gastrointestinal endoscopy,
where Makikai already has strengths. Efforts will be made to make the usefulness of thismedical technique better known.
2. Main initiatives(1) Improve the ability to accept elderly emergency patients.
Improve the ability to provide "around-the-clock" 24-hour primary and secondary
emergency medical care for local elderly people who have high levels of needs.
(2) Improve the range of acute care services and rehabilitation functions for theelderly.
Increase the ability to respond to existing medical disorders (gastrointestinal,circulatory, etc.), employ a full-time orthopedic surgeon, and plan for a full rangeof acute-phase functions.
Establish a new sub-acute patient ward, and increase the number of staff
providing rehabilitation services to help patients recover at home.
(3) Strengthen managerial functions
Properly administer the above-mentioned measures, and aim to reduce externalcosts such as purchasing costs and sub-contracting expenses.
3. Business reorganization (structure)
In this revitalization plan, there are no plans to restructure Makikai‟s operations.
4. Requests to creditors for financial assistance
Makikai will ask the financial and other institutions concerned to forgive the repayment

of ¥1,983 million in principal out of the total debt of ¥3,668 million owed and to forgive
penalties for delayed repayments.
5. Funding plans
The funds for the payments required in this business revitalization plan will come fromoperating cash flow.
Section 4. Conformance with standards for support
This business revitalization plan meets ETIC‟s standards for support.
1. Possession of effective management resources
Makikai offers emergency medical treatment and advanced medical procedures, andcontributes to the supply of medical services in the provinces. Sufficient numbers ofdoctors, nurses and other staff needed to run both the Maki Hospital and the Takasaki
PET General Imaging Center are being maintained.
2. Standards for productivity improvement
Successful implementation of this business revitalization plan is expected to enable
Makikai to meet the required standards with respect to productivity.

3. Standards for financial soundness
Successful implementation of this business revitalization plan is expected to enable
Makikai to meet the required standards with respect to financial soundness.
4. Comparison with liquidation value
The value of Makikai 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.
5. Potential to refinance within three years
Implementation of the business revitalization plan is expected to significantly improve
the financial condition of Makikai, enabling it to reach an appropriate level of financial
stability for the repayment of debt principal and interest, thereby making refinancing
highly possible.

6. Connection with structural oversupply
Implementation of the business revitalization plan will not increase the supplycapacity of Makikai. Accordingly, the plan has been judged as „not hindering theresolution of structural oversupply‟ with reference to Article 19 of the Act on Special
Measures for Industrial Revitalization and Industrial Innovation
7. 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 management
The current directors who were board members when the PET center was
established and interest-bearing debt increased, will resign from their positions.
Directors with management responsibility will renounce all credit claims in Makikai,
including retirement benefits and loans.
2. Responsibility of investors
All of the current investors will forego their rights to request repayment of theirinvestment. Following this Makikai will become a medical corporation without equity
contribution in which investors do not have rights for repayment of investment.

ENDS