Nova Looking for Capital Support

Things just keep looking bleaker and bleaker for Nova. According to the Yomiuri Shimbun [in Japanese], as of June 20, Nova's classes will no longer be eligible to accept money from the government retraining program for the next five years. Since 1999, Nova has received 16 billion yen from the government in assistance that covered 71,000 students. Given Nova's scandalous behavior, it would be more appropriate to say Nova bilked the government out of 16 billion yen.

reports on how Nova president Sahashi is considering selling off properties or forming a partnership with another company to help shore up its capital:

Several companies in various industries, including retail firms, have offered capital and business alliances to Nova Corp., the nation's largest English language school chain, Nova President Nozomu Sahashi said in an interview with The Yomiuri Shimbun Friday.

Sahashi said Nova, which was ordered by the Economy, Trade and Industry Ministry to suspend part of its operations following the discovery of violations of the Specified Commercial Transaction Law, was considering all offers. "We are considering the offers because trust in us has to be restored," he said.

Nova has reportedly seen its sales drop sharply following the ministry's order, which limits the number of new contracts the company can receive. One option the company is considering to meet financial demands is selling off properties and real estate in Osaka estimated to be worth several billion yen.

Concern is growing among Nova students because the company was ordered Wednesday to suspend recruitment of customers for long-term contracts. It was also decided Friday that the company would be excluded from governmental benefits for education programs, as of Wednesday.

"I'm uncertain as whether we'll be able [to regain the public's trust] through our efforts alone," Sahashi said. "If we get a good business partner, we may be able [to regain trust] earlier."

Nova is some pretty dire straights right now. The media is eating them for lunch, they've lost the confidence of the public, Nova has posted losses for two straight years, they've been punished by METI and have had their cash flow restricted for six months, and now they're unable to suck at the government's teat and are now looking for backers. If you work at Nova, your only option now is to polish your resume and get out while you're still getting a paycheck.