JIP-led group secures financing for Toshiba deal

JIP-led group secures financing for Toshiba deal

Two sources said that the TOKYO A Japan Industrial Partners-led consortium has secured commitments for 1.4 trillion yen $10.63 billion of loans in order to finance the buyout of Toshiba Corp., removing a major hurdle in the group's long effort to take the troubled conglomerate private.

The sources who were not identified because the information has not been made public have issued letters of commitments to the JIP-led group, including Sumitomo Mitsui Financial Group.

The sources said that the final buyout proposal would include an equity portion of 1 trillion yen, provided by a number of Japanese companies, including financial services group Orix Corp, chipmaker Rohm Co Ltd and Japan Post Bank.

Toshiba wouldn't make a statement immediately. JIP didn't want to say anything.

The bank's efforts to bring together a bid to buy Toshiba and take it private had appeared to be a major hurdle in the group's efforts to secure firm commitments, according to the sources. The offer will have to go to the conglomerate's board for approval.

In Tokyo trade, Toshiba's shares fell 3 per cent, possibly reflecting investor calculations that a rival bidder with a higher offer may be less likely to emerge because the financing was secured.

Sources said the 1.4 trillion yen of loans included a commitment line of 200 billion yen for working capital.

In October, Toshiba named the JIP-led group as its preferred bidder. Toshiba was asked to provide commitment letters from banks by Nov. 7, something it was unable to secure by that date.