Toshiba Memory secures in funding to strengthen its business base

Toshiba Memory says that its board of directors has agreed today with Sumitomo Mitsui Banking Corporation, MUFG Bank, and Mizuho Bank, to take on JPY 900 billion (EUR 7.39 billion) in new loans and an additional commitment line of JPY 100 billion (EUR 822 million), aiming to further strengthen the company’s business base and capital structure. An additional JPY 300 billion (EUR 2.46 billion) will be procured through an allotment of preferred shares to the Development Bank of Japan, bringing the total amount of new financing to JPY 1.2 trillion yen (EUR 9.86 billion). The new financing will be used to refinance loans totalling of JPY 600 billion (EUR 4.93 billion) from its main financial banks for the acquisition of Toshiba Memory Corporation last June by K.K. Pangea, a special-purpose company formed by a consortium led by Bain Capital. The company will also reorganise its capital structure through moves including early redemption of preferred stock. Meaning that the company will repurchase shares held by Apple; as the Nikkei Asian Review points out - Apple and three other American tech companies hold preferred stock in Toshiba Memory as they were part of the group led by Bain Capital that took over the chipmaker. Toshiba Memory says it will continue to enhance its competitiveness by deploying various financial measures going forward. This will include implementing R&D targeted at flash memory and responding to promising market trends with strategic capital investments in its “K1” manufacturing facility in Kitakami, Iwate Prefecture, Japan.