The list of potential rehabilitation sponsors for Daiei Inc. has been whittled down to three.

The government-backed Industrial Revitalization Corp. gave the consortiums, all led by Japanese corporations, until the end of February to assess the ailing retailer's assets and draw up rehabilitation plans, sources said Friday.

Trading firm Marubeni Corp. and investment fund Advantage Partners Inc. lead one group, while retailer Aeon Co. and Kyocera Corp. head another. The third comprises investment fund Kiacon Corp., trading house Itochu Corp. and leasing company Orix Corp.

The IRC is expected to choose a single candidate by the end of March.

Bids by other consortiums, including those of Ito-Yokado Co. and Wal-Mart Stores Inc. of the United States, failed to make the cut, largely because their rehabilitation outlines did not gel with the IRC's plan to have Daiei shift from a general merchandiser to one centered on groceries.

The candidates still in the running have shown understanding for the IRC plan, sources said.

Marubeni is a major shareholder in Maruetsu Inc., a Daiei group grocery store operator, and has know-how and experience in supermarkets specializing in foodstuffs.

Aeon has the support of trading house Mitsubishi Corp., which boasts a strong food wholesale network, while Kiacon has investments in the distribution industry. Kiacon's current president, Takashi Sawada, is a former vice president of Fast Retailing Co., operator of clothing store chain Uniqlo.

IRC proposed shifting Daiei's strategy away from outlets that offer food, clothing and household products at the end of last year. The plan is to close 53 money-losing Daiei outlets and open 100 Daiei supermarkets specializing in groceries.

Ito-Yokado suggested that more Daiei outlets be closed, while Wal-Mart wanted to stick with the general merchandising policy, sources said.

The corporations dropped by the IRC will not be allowed to join the three shortlisted consortiums, the sources added.(IHT/Asahi: January 22,2005)