Toshiba's preferred bidder finalising $10.6 bln financing for buyout -sources

Sumitomo Mitsui Trust

23/12/2022 04:56

By Makiko Yamazaki and Ritsuko Shimizu
       TOKYO, Dec 23 (Reuters) - The preferred bidder for
Toshiba Corp  6502.T  is finalising 1.4 trillion yen ($10.6
billion) in financing from Japanese lenders to fund its
acquisition, according to two sources, a deal that would see one
of the country's best known conglomerates taken private. 
    Private equity firm Japan Industrial Partners (JIP) is
expected to secure commitments from banks by the end of this
month, said the sources with knowledge of the matter who
declined to be identified because the talks are not public.
    The 1.4 trillion yen includes 200 billion yen in working
capital, they said.
    The main banking arms of Mizuho Financial Group  8411.T ,
Sumitomo Mitsui Financial Group  8316.T  and Sumitomo Mitsui
Trust Holdings Inc  8309.T  are together expected to lend more
than 1 trillion yen, three sources said.
    The core bank unit of Japan's biggest financial group,
Mitsubishi UFJ Financial Group  8306.T  and Aozora Bank Ltd
 8304.T  are also participating, they added. 
    Spokespeople for all five banks declined to comment. JIP was
not immediately available for comment.
    Toshiba, whose businesses span nuclear power, defence
technology and which owns 40.6% of memory chip maker Kioxia
Holdings, declined to comment. It said in a letter to
shareholders last week it was aiming to reach a conclusion with
potential partners as soon as possible.
        The deal is expected to cost at least 2.2 trillion yen,
with financial services group Orix Corp  8591.T , chipmaker Rohm
Co Ltd  6963.T  and Japan Post Bank  7182.T  among the Japanese
companies likely to join JIP in its bid, Reuters has previously
reported.  urn:newsml:reuters.com:*:nL1N33C07V
    The final cost could potentially change due to market
conditions, two sources said.
    Toshiba named a JIP-led group as its preferred bidder in
October for the buyout process. The private equity firm was then
asked by Toshiba to provide commitment letters from banks by
Nov.7, something it was unable to secure.
    But by the start of this month JIP had moved closer to
winning the backing of banks after it proposed concrete
restructuring steps, sources have previously said.  urn:newsml:reuters.com:*:nL1N32Z014
    Once the bid is finalised, investors will be watching
closely to see how a Toshiba special committee and its board
evaluate JIP's plan to overhaul the troubled conglomerate.     
($1 = 132.7200 yen)
 (Reporting by Makiko Yamazaki and Ritsuko Shimizu; Writing by
David Dolan; Editing by Edwina Gibbs)
 ((david.dolan@thomsonreuters.com; +81 3 4563 2708;))