Japanese Industrial Partners Secures USD 10B To Assist Toshiba Acquisition

Per the two sources, a consortium led by Japan Industrial Partners has secured commitments for 1.4 trillion yen ($10.63 billion) in loans to finance the takeover of Toshiba Corp, removing a major hurdle in the group's long effort to take the troubled conglomerate private.

In accordance with the sources, who declined to be identified because the information has not been made public, major Japanese banks, including Sumitomo Mitsui Financial Group, have issued letters of commitment to provide loans to the JIP-led group.

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

As reported by Nikkei business daily, a final buyout proposal worth around 2 trillion yen has been submitted.

Toshiba stated that it would not comment immediately. JIP refused to comment.

According to the sources, obtaining firm commitments from banks appeared to be a major hurdle in the group's efforts to put together a bid to buy Toshiba and take it private. The offer must now be approved by the conglomerate's board of directors.

Toshiba shares fell 3% in Tokyo trading, possibly reflecting investor calculations that a rival bidder with a higher offer is now less likely to emerge because financing has been secured.

According to sources, the 1.4 trillion yen in loans included a 200 billion yen commitment line for working capital.

In October, Toshiba designated the JIP-led consortium as its preferred bidder. Toshiba then asked the private equity firm to provide commitment letters from banks by Nov. 7, which it was unable to do by that date.