Toshiba to meet banks Tuesday, loan waiver expected: sources

Thu Jan 5, 2017 11:53pm EST
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By Taiga Uranaka

TOKYO (Reuters) - Toshiba Corp plans to meet with creditor banks on Tuesday to explain how it is addressing a massive charge that the Japanese company says it must take on its U.S. nuclear business, three bankers briefed on the meeting said.

The bankers told Reuters on Friday they expect creditors will agree not to call in loans while they discuss steps to aid the laptops-to-engineering conglomerate.

Toshiba officials could not immediately be reached for comment. The bankers were not authorized to speak with media on the matter and so declined to be identified.

Syndicated loans could be endangered because credit-ratings downgrades put Toshiba in violation of loan covenants, the bankers said, adding that it was routine for them to grant a waiver in such a case to avoid a funding crisis.

Toshiba, still recovering from a $1.3 billion accounting scandal in 2015, shocked investors again last month by announcing cost overruns at a U.S. nuclear business bought in 2015 which could now mean a charge against profit that could top $4 billion.

Tuesday's "explanatory session" is also meant as a show of support for Toshiba, as major creditors present a united front for the borrower hit by a series of scandals and losses, one of the bankers said.

The three bankers said they did not expect Toshiba to present new, major information at the meeting, which they depicted as the start of the process of working out rescue plans.

Toshiba's top executives have said they will finalize the loss on the nuclear business by mid-February, whereas sources have told Reuters they expect Toshiba to give its bankers an idea of the scale of the problem late this month.   Continued...

FILE PHOTO -  Workers prepare the New Year's eve numerals above a Toshiba sign in Times Square in Manhattan, New York City, U.S., December 26, 2016.   REUTERS/Andrew Kelly/File Photo