Toyota seeks ¥1 tril line of credit as virus hits funding market
28 March, 2020
Toyota Motor Corp has asked two Japanese megabanks to create a line of credit totaling 1 trillion yen ($9.2 billion), company sources said Friday, a move that signals the carmaker is struggling with rising funding costs in the market as a result of coronavirus outbreak.
Toyota's financial base remains solid nonetheless it is looking to increase its cash on hand to prepare for an additional increase in the epidemic, which has led to plant closures worldwide, the sources said. They added, the banks -- Sumitomo Mitsui Banking Corp and MUFG Bank -- are likely to accept the request.
The commitment line would allow Toyota to borrow up to 500 billion yen from each one of the banks when it requires, said the sources.
Toyota had around 5.2 trillion yen in cash and deposits as of the end of this past year, according to its filings.
The coronavirus outbreak has forced Toyota to suspend plant functions in america and Europe. It has also seen a sharp fall in sales in China, where the outbreak started.
The world's second-largest automaker group by sales may also temporarily halt seven production lines at five of its domestic plants from April 3.
Source: japantoday.com
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