Toshiba seeks another 300 billion yen (2.272 billion euro) credit line to pay for its social plan.
Accounting scandal leads to restructuring
The revelation of its accounting mishap, with embellished profits since 2009, has put Toshiba with its back against the wall. The scale of the fraud reached 1.2 billion euro, three times higher than anticipated at first, which means that the Japanese electronics group (with copying machines, laptops, hard disks, televisions and medical systems) has to sell divisions and let staff go.
Its computer and household electric appliances divisions have been put up for sale, while 6,800 people will lose their jobs and more than 10,000 in total when the entire restructuring plan goes through.
Such a restructuring plan also costs money, money Toshiba hopes to get through an additional 300 billion yen loan. Sumitomo Mitsui Banking Corp, Sumitomi Mitsui Trust Bank and Mizoho Bank already gave a 400 billion yen (3.029 billion euro) loan in September, but with the additional 300 billion yen loan, the total loan amount will reach more than 1,000 billion yen (7.573 billion euro).
Credit rating takes a blow
Last week, Toshiba said it will end its fiscal year with a 550 billion yen (4.165 billion euro) record loss and its decent credit rating will also take a blow now. Moody's places Toshiba only two steps above the so-called junk bonds.