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Investing.com -- The Toyota group, including Toyota Motor (NYSE:TM) and other associated companies, is contemplating a loan of up to 3 trillion yen (equivalent to $20.7 billion) from financial institutions, according to Nikkei. The purpose of this borrowing is to assist in privatizing Toyota Industries (OTC:TYIDF), a key supplier of parts and manufacturer of forklifts for Toyota Motor.
The privatization effort will be carried out via a special purpose vehicle, funded by the companies in the Toyota group. This vehicle will initiate a tender offer for Toyota Industries. This move is seen as a strategic plan to alleviate Toyota Industries from shareholder pressure.
Toyota Industries plays a crucial role in Japan’s leading automaker’s supply chain, making this financial maneuver significant within the industry.
The company is expected to accept the buyout, which is estimated to cost over $41 billion in total, with the loans covering about half of the transaction.
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