Toshiba shares rally on Prospect of New Loans

Toshiba shares rallied more than 10% on Thursday on reports the firm was about to secure substantial new loans for its restructuring efforts. 

 

The company is in talks with several Japanese lenders over money it needs to reorganise its business in the wake of a massive accounting scandal.

The embattled electronics giant is hoping for loans of up to 250bn yen ($2.2bn; £1.6bn), said Nikkei daily.

Toshiba confirmed it was in talks but said the details had not been decided.

The Nikkei daily said Sumitomo Mitsui Banking, Mizuho Bank and Sumitomo Mitsui Trust Bank were like to provide the funds as early as this month.

The funds are vital for the survival of the Japanese conglomerate as it streamlines its bloated businesses, whose poor performances had gone unnoticed during almost a decade of false accounting.

Cooking the books

The restructuring comes after the company admitted in 2015 it had overstated its profits by $1.3bn over seven years.

As part of the efforts to balance its books, the firm has announced major job

cuts and the selling of several plants and units to external investors.

Toshiba currently employs almost 200,000 people.

Its shares have lost about 40% of their value since April last year, when news of the profit overstatement began to emerge.

In July, its chief executive, president and six other high-level executives resigned from the company.

Toshiba, which is involved in a wide-range of industries from electronics to nuclear energy, was founded in 1875 and launched the world's first mass-market laptop in 1985.