Toshiba to get restructured with new $2.5 billion credit line

Toshiba Corp, which is undergoing a $1.3 billion accounting scandal, plans to ask for a new 300 billion yen (accounting to $2.49 billion) credit line by the end of January. This money would be used to fund a large-scale restructuring of the Japanese multinational conglomerate.

Toshiba would be approaching its lenders for the new commitment line, as stated by a company spokesman. Earlier reports from The Nikkei financial daily, Toshiba would also seek help from Mizuho Bank and Sumitomo Mitsui Banking Corp.

In September, Toshiba secured a 400 billion yen commitment line. This has given the company a wider safety net, helping it to recover from the accounting scandal in which it overstated profits from around 2009.

The Tokyo Stock Exchange has placed Toshiba stocks in a special "watch" category, to be able to see if it can improve internal controls. Also, Moody's recently downgraded the company's debt rating to junk status. Both these moves are expected to toughen the funding process through debt or new shares.

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