Toshiba bidder JIP still hasn't secured firm commitments from lenders, sources say

Sumitomo Mitsui Trust

30/12/2022 10:42

TOKYO, Dec 30 (Reuters) - The preferred bidder for
Toshiba Corp  6502.T  was not able finalise its planned 1.4
trillion yen ($10.61 billion) in financing for the acquisition
as of Friday, two sources said, delaying into next year its
effort to secure firm commitments from banks.    
    Private equity firm Japan Industrial Partners (JIP) had been
expected to secure commitments from Japan's biggest banks by the
end of this year, marking a major milestone in its effort to
take Toshiba private.
    However, financing talks are now likely to continue into the
new year, the sources said, declining to be identified because
the information has not been made public.
    While the size of the financing is largely agreed, talks
between JIP and the banks continue, including on the potential
dispatch of bank executives to Toshiba following a buyout - to
help with its restructuring - as well as issues on future
governance, according to one person with knowledge of the talks.
    No one was immediately available for comment at JIP. Most
Japanese businesses and offices are now closed for the country's
annual new year holidays until Jan. 3. A Toshiba spokesperson
declined to comment.
    The 1.4 trillion yen in financing includes 200 billion yen
in working capital, Reuters has previously reported.
    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, Reuters has reported, with the core bank
unit of Japan's biggest financial group, Mitsubishi UFJ
Financial Group  8306.T  and Aozora Bank Ltd  8304.T  also
participating.
    Toshiba, whose businesses span nuclear power, defence
technology and which owns 40.6% of memory chip maker Kioxia
Holdings, said in a letter to shareholders this month it was
aiming to reach a conclusion with potential partners as soon as
possible.
    The deal is expected to total 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, sources have 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 = 132.0100 yen)
 (Reporting by Ritsuko Shimizu; Writing by David Dolan; Editing
by Kim Coghill)
 ((david.dolan@thomsonreuters.com; +81 3 4563 2708;))