Japan Banks Target End-January for Toshiba Bid Loan Decision

(Bloomberg) -- Top Japanese banks are targeting the end of this month to issue commitment letters for a loan that backs Japan Industrial Partners Inc.-led consortium’s takeover offer for Toshiba Corp., according to people familiar with the matter.

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The banks, including Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Sumitomo Mitsui Trust Holdings Inc., have resumed discussions with the JIP group on the terms of the ¥1.4 trillion ($10.6 billion) loan, said the people, who asked not to be identified because the information is private.

The lenders initially were looking to sign off by end-December on ¥1.2 trillion in syndicated loan to help finance JIP’s bid and another ¥200 billion to cover operational costs after Toshiba’s privatization. Those negotiations were previously stalled over covenants and collateral, Bloomberg News reported at the end of last year.

Discussions are ongoing, and the JIP-led consortium remains opposed to some of the banks’ demands including reserving senior positions in Toshiba’s management for their representatives, and adding covenants to the loans, the people said. However, the preferred bidder and the lenders are hopeful that they could reach a consensus in the coming weeks, they added.

Representatives for JIP and the banks declined to comment.

Securing financing from banks has been a major hurdle in Toshiba’s drawn out push to go private, in an effort to reboot one of Japan’s iconic brands sullied by years of scandals. Banks have become more wary of funding mega deals amid rising financing costs globally.

JIP has secured another ¥1 trillion of financing from about 20 potential co-investors to back its offer, Bloomberg News has reported. Those include Japanese companies such as chip maker Rohm Co. and financial services firm Orix Corp.

--With assistance from Taiga Uranaka and Kana Nishizawa.

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