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Toshiba seeks 200b yen loans for restructuring
[TOKYO] Toshiba Corp is asking three Japanese lenders for additional loans of about US$1.8 billion to fund restructuring in the wake of an accounting scandal, sources with direct knowledge of the matter said on Thursday.
Toshiba is seeking about 200 billion yen (S$2.45 billion) from Sumitomo Mitsui Banking Corp, Mizuho Bank and Sumitomo Mitsui Trust Bank, said the sources, who were not authorised to discuss the matter publicly.
The lenders are willing to extend loans, though the amount is subject to negotiations, the sources said.
The funds are vital for the survival of the Japanese toaster-to-nuclear reactor conglomerate as it streamlines its bloated businesses, whose poor performaces have been masked by years of false accounting.
Shares in Toshiba rose as much as 10.5 per cent in early trade on the news, first reported by Nikkei business daily, outperforming the broader market which was up about half a percent.
A Toshiba official confirmed the company had been in talks with its main creditors for additional loans, but said the amount and conditions had not been decided.
The company, which has seen its credit rating cut to junk by Moody's Investors Service, secured a credit line of 400 billion yen from lenders in September.
Officials at the three lenders declined to comment.
In the wake of a book-keeping scandal in which Toshiba overstated profits from around 2009, chief executive Masashi Muromachi has pledged to accelerate restructuring.
It has already announced more than 10,000 job cuts as well as plans to overhaul its chip business and to sell its loss-making laptops and home appliances businesses.
To raise more cash, Toshiba plans to sell its entire medical equipment unit rather than only a partial stake in Toshiba Medical Systems Corp, people familiar with the matter told Reuters this week.
One of the people said the deal value could go as high as 650 billion yen amid strong demand for medical businesses with high growth prospects, offering Toshiba a much-needed financial lifeline.