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Business

Scandal-hit Toshiba to seek billions in new credit

Japanese conglomerate Toshiba is planning to seek billions of dollars in new credit to finance its burgeoning restructuring costs. It comes after the company's recent announcement to slash thousands of jobs.

Toshiba is looking for an additional 300 billion yen ($2.5 billion) in credit to pay the firm's ballooning restructuring costs, a news report said Tuesday.

The 140-year-old Japanese company is likely to approach financial institutions, including Mizuho Bank and Sumitomo Mitsui Banking, the Nikkei business daily reported, citing Chief Financial Officer Masayoshi Hirata.

The company is also in talks to sell its equipment maker Toshiba Medical Systems, which would likely boost its capital base to more than 1 trillion yen by the middle of the next financial year, according to the report.

Toshiba had secured 400 billion yen in credit lines in September, but it later found that restructuring costs have climbed to around 260 billion yen in the year through March, the report said.

The company was not immediately available for comment.

A high-profile scandal

Last week, Toshiba said it was predicting a record net loss of 550 billion yen ($4.5 billion) for the current financial year due to costs related to large-scale restructuring following a high-profile accounting scandal.

Toshiba was earlier this year hit by revelations that executives systematically pressured employees to inflate profits in a years-long scheme to hide poor results and make money-losing businesses appear profitable.

It's been one of the most damaging accounting scandals to hit Japan in recent years and has led to the resignation of several top executives.

Two weeks ago, the Securities and Exchange Surveillance Commission watchdog said Toshiba should be slapped with a record $60-million fine over the scandal. While Toshiba currently has a workforce of 200,000 globally and operates in 76 countries, the company expects to slash a total of 10,000 jobs.

Originally founded to develop telegraphic equipment, Toshiba now sells everything from rice cookers to nuclear reactors and operates in fives domains - energy and infrastructure, community solutions, healthcare systems, electronic devices and lifestyle products and services.

sri/hg (dpa, Reuters)

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