Toshiba asks for loan rollover by offering new collateral

JAPAN NOW

Toshiba Corp. on Wednesday offered to provide more collateral, including shares of its prized memory chip unit, to its creditor banks, asking them to roll over their loans until the end of April.

Toshiba held a meeting with the lenders at its headquarters after the beleaguered technology conglomerate missed a second deadline to publicize its third-quarter earnings Tuesday, deepening its financial woes.

The request for rollover loans is the third by Toshiba since it emerged last December that its U.S. nuclear unit Westinghouse Electric Co. is seeing huge losses.

Toshiba plans to provide new collateral, including shares of Toshiba Memory Corp., which will be created through the spinoff of its profitable chip business, and those of other group firms as well as real estate, sources close to the matter said.

It asked the banks to reply within the month. The creditors said earlier they will maintain the current balance of loans outstanding by the end of March.

Toshiba's three main lenders -- Sumitomo Mitsui Banking Corp., Mizuho Bank and Sumitomo Mitsui Trust Bank -- agreed to continue to support the company, the sources said.

Toshiba has borrowed around 280 billion yen ($2.4 billion) in syndicated loans from the three main banks and regional lenders, some of which have raised concerns about Toshiba's business outlook, they said.

During Wednesday's meeting, Toshiba briefed its creditors on the reason for further delaying the earnings report on the nine-month period through December.

A month after missing the initial deadline, Toshiba said Tuesday it again pushed back the deadline through April 11 due to the need for more time to look into accounting problems at Westinghouse.

It also said that a filing for Chapter 11 bankruptcy protection for Westinghouse is an option, the first time it has admitted to considering such a move, while adding it will sell a majority of the shares in the U.S. unit in fiscal 2017, a move that will remove the subsidiary from the group's books and limit further losses.

Earlier Wednesday, the Tokyo Stock Exchange placed Toshiba shares under special supervision, warning the market that the stock faces the risk of being delisted.

Toshiba submitted a report on its internal controls to the TSE in an attempt to leave the supervision post. The bourse will take several months assessing Toshiba's improvement measures before deciding whether it should remain listed.

Shares of Toshiba had been on the TSE's watch list following its accounting scandal in 2015.

Even if the stock remains listed, it will be demoted to the Second Section of the TSE from its main group if Toshiba falls into negative net worth at the end of the current fiscal through March 31.

==Kyodo

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