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Toshiba said to offer shares to lenders

Tuesday, April 04, 2017 - 01:12

Toshiba Corp will meet creditor banks to ask them to accept as collateral shares in its memory chip unit being split off and other businesses and not call in their loans, sources with direct knowledge of the matter say. As Sara Hemrajani reports, the news comes as the firms shares plunged another 10 percent.

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Toshiba taking a battering in Tokyo. The company's shares plunging more than 10 percent in morning trade, marking a second day of declines. Toshiba's creditors are reportedly being asked to not call in their loans. Sources say Toshiba has gone to its lenders to offer collateral in the form of equity in parts of the business instead. That proposition could spell deeper cash flow issues. Soundbite: Simon French, Chief Economist, Panmure Gordon, saying (English): "When equity is put on offer rather than cash, then there are questions regarding the company's ability to generate cash flow to service its debts. If there are illiquid assets or more illiquid assets like equity and clearly riskier assets on offer, that is symptomatic of broader issues in the financial management of the business, and of course investors hate that." Another concern is the long delayed earnings announcement. People close to the matter say Toshiba would likely miss a third deadline to post its quarterly results. Those figures are due on April 11th but auditor PwC is said to still have questions about the business.

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Toshiba said to offer shares to lenders

Tuesday, April 04, 2017 - 01:12