5 banks to lend 1.2 tril. yen to help Japanese fund buy out Toshiba

Sumitomo Mitsui Banking Corp. and four other Japanese banks plan to lend a total of roughly 1.2 trillion yen ($8.87 billion) to a domestic investment fund to help it buy out Toshiba Corp., a source familiar with the matter said Thursday.

Japan Industrial Partners Inc. has already secured an investment offer worth about 1 trillion yen from a group of more than 10 Japanese companies, including Orix Corp. The acquisition of the embattled conglomerate is expected to total between 2.2 trillion yen and 2.5 trillion yen.

Japan Industrial Partners leads a consortium that Toshiba has designated as the preferred bidder for the potential buyout. Its plan for rebuilding the conglomerate hinges on taking it private.

The five banks planning the combined 1.2 trillion yen loans are SMBC, Mizuho Bank, Sumitomo Mitsui Trust Bank, MUFG Bank and Aozora Bank, according to the source. They are aiming to finalize the lending plan by year-end.

In early October, Toshiba selected the consortium as the preferred bidder over Japan Investment Corp., a state-backed fund seeking to team up with Bain Capital for the buyout.

Toshiba has been struggling to recover from problems such as a window-dressing scandal and a massive loss in its U.S. nuclear power business that surfaced in the 2010s.

© Kyodo News