Toshiba says to seek new $2.5 billion credit line for restructuring
TOKYO – Toshiba Corp (6502.T), reeling from a $1.3 billion accounting scandal, said it intends to ask for a new 300 billion yen ($2.49 billion) credit line by the end of January to fund a large-scale restructuring.
Toshiba is likely to approach its lenders for the new commitment line, a company spokesman said on Tuesday. The Nikkei financial daily earlier said it would likely seek help from banks including Mizuho Bank and Sumitomo Mitsui Banking Corp.
The move comes after Toshiba in September secured a 400 billion yen commitment line, and gives the company a wider safety net as it seeks to recover from the book-keeping scandal in which it overstated profits from around 2009.
Moody’s recently downgraded the company’s debt rating to junk status, and the Tokyo Stock Exchange has placed Toshiba stocks in a special “watch” category to see whether it can improve internal controls. Both moves have made it harder for the company to raise funding through debt or new shares.
The company said last week it would slash 6,800 consumer electronics jobs, taking total cuts beyond 10,000, including previously announced plans, as the sprawling conglomerate focuses on chips and nuclear energy. It also expects a record net loss this year.
Toshiba shares were up 1.2 percent on Tuesday compared to a flat overall stock market .N225. -Reuters