Toshiba's preferred bidder moving closer to securing financing for buyout -sources

Japan Post Bank

08/12/2022 10:00

By Makiko Yamazaki, Kane Wu and Ritsuko Shimizu
       TOKYO/HONG KONG, Dec 8 (Reuters) - Japan Industrial
Partners, the preferred bidder to buy out Toshiba Corp  6502.T ,
has moved closer to securing financing from banks, three people
with knowledge of the matter said.
    Concrete restructuring steps proposed by JIP have made a
group of lenders, including Toshiba's main banks Sumitomo Mitsui
Banking Corp and Mizuho Bank Ltd, more confident in JIP's
post-acquisition plans, said two of the people who have direct
knowledge of the financing discussions.
    JIP, which is planning to form a consortium, is hoping to
secure commitments from banks this month for a buyout that would
value the industrial conglomerate at around 2.2 trillion yen
($16 billion) including debt, one of the people and a fourth
source said.
    Those two sources cautioned, however, that how much each
bank will take on in the financing has not been fixed yet and
it's not clear when that would be finalised, they said.
    JIP's bid has called for Toshiba management to retain their
jobs - a proposal which initially made some of the banks
cautious about lending, sources have said.
    The new restructuring steps proposed by JIP could not be
immediately learned.
    The sources all declined to be identified as the talks are
private.
    Sumitomo Mitsui Banking Corp, the core unit of Sumitomo
Mitsui Financial Group Inc  8316.T , and Mizuho Bank Ltd, the
core unit of Mizuho Financial Group Inc  8411.T  declined to
comment.
    Toshiba, whose businesses span nuclear power, defence
technology and which owns 40% of memory chip maker Kioxia
Holdings, also declined to comment.
    Orix Corp  8591.T , chipmaker Rohm Co Ltd  6963.T  and Japan
Post Bank Co Ltd  7182.T  are among Japanese companies likely to
join JIP in its bid, sources have previously said. 
    Global private equity firms that have shown interest in
joining a Toshiba buyout could also participate in the debt
portion of the deal, said a separate person with knowledge of
the situation.
    Another bidder, the state-backed Japan Investment Corp
(JIC), which sources have said could form a consortium with Bain
Capital and MBK Partners, has been sidelined, one of the people
said. 
    JIC, MBK and Bain declined to comment.
    JIP originally teamed up with JIC in a first round of
bidding earlier this year, but disagreement over whether to keep
Toshiba's management saw them make separate bids in the second
round, Reuters has previously reported. 
   ($1 = 137.0500 yen)
 (Reporting by Kane Wu, Makiko Yamazaki and Ritsuko Shimizu;
Editing by Edwina Gibbs)
 ((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))