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Toshiba asks for extension of waiver on loan covenant violation: sources
February 15, 2017 / 7:48 AM / 10 months ago

Toshiba asks for extension of waiver on loan covenant violation: sources

TOKYO (Reuters) - Japan’s Toshiba Corp on Wednesday asked creditors for an extension of a waiver for a loan covenant violation until the end of March, financial sources who were briefed on the matter said.

Reporters raise their hands for a question during a news conference by Toshiba Corp CEO Satoshi Tsunakawa and other senior sompany officials at the company's headquarters in Tokyo, Japan February 14, 2017. REUTERS/Toru Hanai

The request comes one day after the beleaguered conglomerate failed to deliver audited third-quarter earnings as scheduled, instead saying it needed more time to look at potential problems at its Westinghouse division.

It also said it expected to book $6 billion writedown on its U.S. nuclear business that will wipe out shareholders’ equity and may sell a majority stake in its prized flash-memory chip unit.

Toshiba made the request at the meeting with banks and life insurers, the sources said, declining to be identified as they were not authorized to speak to the media on the matter.

Toshiba was granted a one-month waiver by its banks in January. Cuts to credit ratings after the TVs-to-nuclear conglomerate warned of a large writedown put it in violation of a loan covenant, which could prompt lenders to call in loans early.

A Toshiba spokesman declined to comment.

Reporting by Taiga Uranaka; Editing by Edwina Gibbs

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