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Toshiba Memory to draw ¥1.3 trillion in bank loans before going public

Toshiba Memory to draw ¥1.3 trillion in bank loans before going public

Toshiba Memory Holdings Corp. is set to draw a total of ¥1.3 trillion ($11.7 billion) in loans from four Japanese banks, sources familiar with the situation said late on Wednesday.

With the additional funds, the former chip unit of Toshiba Corp. will step up preparations for an initial public offering after buying back preferred shares currently held by Apple Inc. and other business partners.

The chipmaker will get a total of ¥1 trillion from its major creditors, MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank, and ¥300 billion from the state-backed Development Bank of Japan, the sources said.

The company had sought to list on the first section of the Tokyo Stock Exchange earlier, in September, but that is not likely to happen before November, according to the sources.

The government-backed INCJ fund was considering investing in Toshiba Memory as well, but has decided not to do so, the sources said.

Due to serious financial difficulties, Toshiba was forced to sell the chip unit last year to a consortium led by U.S. private equity fund Bain Capital for about ¥2 trillion.

Toshiba reinvested about ¥350 billion in the Bain-led consortium, which includes Apple, Dell Inc. and South Korean chipmaker SK Hynix Inc.

Bain holds 49.9 percent of the voting rights in the chip company, while Toshiba has 40.2 percent of the rights and optical glass maker Hoya Corp. has 9.9 percent. Hynix and Apple also own stakes without voting rights.

Toshiba Memory adopted a holding company structure in March.