Konica Minolta to Secure Funding through Hybrid Loan (Subordinated Term Loan)
Tokyo (August 28, 2017) - Konica Minolta, Inc. (Konica Minolta or the Company) announced that it entered into an agreement today regarding funding of 100 billion yen through a hybrid loan (subordinated term loan: the Loan).
Aim and Background of Funding
Under the new medium-term business plan SHINKA 2019, which began in April 2017, Konica Minolta aims to become "a digital company with insight into implicit challenges" and has been accelerating its transformation to a high-profitability company.
In realizing the goals of the plan, with the aim of implementing growth strategies toward profitability enhancement, strengthening financial standing and maintaining and raising capital efficiency, the Company secures funding through the Loan.
The Loan has an intermediate nature between equity and liabilities. Being liabilities, it has aspects and characteristics similar to equity, such as optional deferral of interest payments, an especially long repayment term and subordination in bankruptcy proceedings. Therefore, the Loan is expected to be evaluated for equity credit on 50% of the funding by Rating and Investment Information, Inc. and Japan Credit Rating Agency, Ltd., thereby contributing to substantially strengthening the financial standing without dilution of shares.
Overview of the Loan
|(1) Amount to be borrowed||100 billion yen|
|(2) Date of Agreement||August 28, 2017|
|(3) Drawdown Date||October 31, 2017|
|(4) Maturity Date||October 29, 2077
However, unless any of the subordination events has occurred and continues, the Company may prepay all or part of the principal of the Loan on each interest payment date on or after October 31, 2022.
|(5) Use of proceeds||General business funds|
|(6) Replacement Restrictions||The Company intends not to prepay the principal of the Loan unless the Company raise funds through the Replacement Securities (meaning common stock or any security or debt that have been approved by the rating institution as having equal or higher equity credit than that of the Loan) equal or more than the Required Replacement Amount (meaning the amount calculated by multiplying the principal amount of the Loan to be prepaid by 50%, and then dividing by the equity credit of the Replacement Securities thereof shown in percentage), within six month before the date of prepayment.
However, with respect to the prepayment on the interest payment date on or after October 31, 2022, if the Company satisfies certain financial conditions, there is a possibility that the Company does not raise funds through the Replacement Securities.
|(7) Interest Payment||The Company may, at its discretion, defer payment of all or part of interest on the Loan.|
|(8) Subordination||The right to request payment under the Loan is subordinated to all senior creditors in the Company's liquidation proceedings, bankruptcy proceedings, corporate reorganization proceedings, and civil rehabilitation proceeding.
No terms and conditions of the Loan may be changed in any respect to the disadvantage of any creditor of the Company other than the creditors of the subordinated receivables (meaning the receivables that have substantially equal subordination condition as the Subordinated Loan).
|(9) Evaluation of Equity Credit (expected)||Class 3, 50% (Rating and Investment Information, Inc.)
Middle Level, 50% (Japan Credit Rating Agency, Ltd.)