October 28, 2017
TOKYO- Kobe Steel Ltd. <5406> has shown creditor financial institutions a plan to secure some 70 billion yen mainly by selling some assets earlier than scheduled, informed sources told Jiji Press on Friday.
The steelmaker aims to strengthen its financial base amid an increasingly uncertain future outlook after the revelation of quality data falsification for aluminum, copper and other products.
The current plan holds that Kobe Steel will procure up to 100 billion yen over the five years through fiscal 2020, which ends in March 2021, mainly by selling assets.
The company has already secured some 30 billion yen by selling shares in an elderly nursing home operator and reviewing the fund procurement plans within the group.
Kobe Steel now hopes to obtain the remaining 70 billion yen before fiscal 2020, the sources said.
On Oct. 20 this year, Kobe Steel held a tender for Shinko Real Estate Co., a subsidiary based in the western city of Kobe. Kobe Steel will sell securities and take other steps to strengthen its financial health and prevent funding problems.
Kobe Steel has a 120-billion-yen line of credit from banks. The company held 203 billion yen in cash and deposits on a consolidated basis as of the end of June.
The steelmaker "faces no financing problem for now," said a senior official of one of the company's partner banks.
But it is uncertain how much costs Kobe Steel will have to pay due to the scandal. The number of companies the group shipped products affected by falsified data totals 525.
Many are expected to request Kobe Steel pay for the costs of inspections to confirm product safety and replace affected parts. In addition, foreign clients may demand damages. Jiji Press
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