Toshiba president and CEO Masashi Muromachi (centre) is surrounded by reporters as he leaves a conference at the company headquarters in Tokyo. The company board is deeply sorry for betraying the trust of our stakeholders and causing turmoil in the markets, he said yesterday.

Bloomberg
Tokyo

Toshiba Corp added a ¥400bn ($3.3bn) credit commitment with banks amid uncertainty about the eventual costs for an accounting scandal that has already led to more than $1.3bn in cuts to reported profit.
The agreement has a two-year term and brings the total loan facility to ¥762bn, the company said yesterday in a statement. Toshiba didn’t disclose the cost of the new credit-line and said it will supplement the liquidity of cash reserves.
About $6bn of market value has been wiped from Toshiba since the company withdrew its earnings forecast in May and announced an accounting probe that was later expanded. The Tokyo Stock Exchange has fined the company ¥91mn for the accounting problems, which regulators are still investigating.
“Toshiba needs to do some restructuring and probably will have to cut jobs,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “There is no immediate financing uncertainty for the company. The credit line is more for mid- to long-term concern.” President Masashi Muromachi has vowed to complete a “bold restructuring” of the companies chipmaking and lifestyle divisions after reporting an annual loss and restating more than six years’ worth of earnings.
“We are deeply sorry for betraying the trust of our stakeholders and causing turmoil in the markets,” Muromachi said at an extraordinary shareholders meeting outside Tokyo yesterday. He won share-owner approval to lead the company at a meeting that included calls for his resignation from investors angered by the scandal.
“You were chairman when this happened, what in the world were you doing?” one of the shareholders asked during a question-and-answer session. Another investor said Muromachi was unfit to lead the company whether he knew about the improprieties or not.
The possibility of further costs related to fines and investor lawsuits, along with the fact that Toshiba’s shares are on alert on the Tokyo Stock Exchange may make it more difficult for the company to raise money.
Sumitomo Mitsui Banking Corp, Mizuho Bank and Sumitomo Mitsui Trust Bank are providing the credit, Toshiba spokeswoman Midori Hara said by phone.
The shares gained 2.9% to ¥300.4 at the close in Tokyo, compared with a 2.6% gain for the benchmark Topix.
The gain pares Toshiba’s decline this year to 41%, compared with a 0.3% gain in the benchmark Topix index.
After acknowledging that it overstated earnings, Toshiba reduced net income by a total of ¥155.2bn for the years ending March 2009 to March 2014, plus the first three quarters of the next year.
Toshiba shares were put on alert by the Tokyo Stock Exchange on September 15 after it disclosed accounting irregularities.
The company said in September it had set aside ¥8.4bn to cover possible penalties.
Companies put on alert status are required to submit an improvement report to the exchange before being removed from the list.