Toshiba’s total loan facility could top 1 trillion yen ($8.3 billion) as it seeks a second bank credit line of 300 billion yen ($2.5 billion) to pay for mounting costs stemming from an accounting scandal, Bloomberg reported Monday.
The scandal has led to layoffs and asset sales for the Tokyo-based company, which last week forecast a record 550 billion yen ($3.7 billion) annual loss. Toshiba plans to apply for an additional 300 billion yen ($2.5 billion) in credit from undisclosed lenders by the end of January, spokeswoman Yuu Takase told the news service. In September, the company received a 400 billion yen ($3.3 billion) credit line from Sumitomo Mitsui Banking Corp., Mizuho Bank, and Sumitomo Mitsui Trust Bank.
The additional borrowing is needed to pay for thousands of job cuts and the overhaul of the businesses that make televisions and personal computers, according to Bloomberg.
President Masashi Muromachi took over this year to clean up after the accounting scandal, which has wiped about $8 billion of the company’s market value. Toshiba’s stock has fallen 55% this year as the company withdrew its earnings forecast in May and announced an accounting probe that was later expanded.
Earlier this month Moody’s cut its credit rating on the company two levels to junk. The spread on Toshiba’s bonds due in 2020 jumped 100-fold this year to 311 basis points, reflecting the risk premium investors demand over the yen swap rate.