Kioxia’s banks refinance a $13.5 bln loan for the Western Digital merger. According to a report from Bloomberg News on Wednesday, lenders for Kioxia Holdings are reportedly seeking to refinance debts totaling 2 trillion yen ($13.5 billion) to support the company’s probable merger with the flash memory business of Western Digital (WDC.O).
According to Bloomberg, which cited anonymous sources, the financial institutions Sumitomo Mitsui Financial Group (8316.T), Mizuho Financial Group (8411.T), and Mitsubishi UFJ Financial Group (8306.T) intend to submit a commitment letter for the refinancing the next month.
According to Bloomberg, a portion of the loan will be put toward paying special dividends to the shareholders of Kioxia.
According to a report by Bloomberg, the terms of the acquisition that is now being negotiated stipulate that Western Digital will control approximately 50.5% of the combined company, with Kioxia holding the remaining 49.5%. The hard drive business that Western Digital currently operates is not anticipated to be a part of the deal.
Kioxia stated that the information in the story is not something the company has announced, and the company declined to comment further on the matter. SMFG, Mizuho, and MUFG all opted not to comment on the matter.
The loan for 2 trillion yen will likely be funded through loan commitments for 400 billion yen, and the Development Bank of Japan will give a loan for 300 billion yen. According to Bloomberg’s story, the remaining funds will most likely be distributed equally among the three megabanks.
According to a story from Reuters in May, Kioxia and Western Digital are speeding up merger talks and locking down a deal structure amid a dip in the market for flash memory.
