• JIJI

  • SHARE

Kobe Steel Ltd. has shown creditors a plan to secure some ¥70 billion mainly by selling assets earlier than scheduled, informed sources said.

The steel maker aims to strengthen its financial base amid an increasingly uncertain outlook amid a quality data falsification scandal that has tainted its aluminum, copper and other products.

According to the plan, Kobe Steel will procure up to ¥100 billion over the five-year period through fiscal 2020 ending in March 2021, mainly by selling assets.

The company has already secured some ¥30 billion 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 before fiscal 2020, the sources said Friday.

On Oct. 20 this year, Kobe Steel held a tender for Shinko Real Estate Co., a subsidiary based in 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 credit line with its banks. The company held ¥203 billion in cash and deposits on a consolidated basis as of the end of June.

The steel maker “faces no financing problem for now,” said a senior official at one of its partner banks.

But it is uncertain how much financial damage the scandal will cause. The number of customers affected by the data scandal is 525. Many are expected to ask Kobe Steel to foot the cost of the inspections needed to confirm its products are safe and to replace the affected parts. In addition, foreign clients may demand damages.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW

PHOTO GALLERY (CLICK TO ENLARGE)