Toyota financial unit asks to borrow public money

TOKYO, March 3, 2009 (AFP) - Toyota Motor Corp.'s financial unit said Tuesday that it had asked for an emergency loan from a state-backed lender to ride out the financial crisis, with reports putting the sum at two billion dollars.

Toyota Financial Services, which provides loans to car buyers, is in consultations with the Japan Bank for International Cooperation (JBIC) but the size of the loan has not yet been decided, company official Mio Sugito told AFP.

"The move is aimed at diversifying our financial resources as the international financial market is getting tighter, especially in the United States," Sugito said.

Pedestrians pass before a share prices board in Tokyo on March 3, 2009. Japan's Nikkei stock index fell one percent in morning trade, coming close to a 26-year low after a Wall Street plunge as fears deepened about the problems of the financial sector (Photo: AFP)

The Nikkei business daily and the Jiji Press news agency reported that Toyota's wholly-owned financial subsidiary is asking for about 200 billion yen (two billion dollars), without citing sources.

If the loan is realised, it will be JBIC's first to a Japanese automaker under a new government scheme, the reports said.

JBIC's main role is to invest in projects in developing countries, but the government in December decided as an emergency measure to allow the bank to lend to Japanese companies operating in developed countries.

The move came amid concerns that firms are finding it increasingly hard to raise funds from distressed markets and cash-strapped banks.

Toyota Motor ended General Motors' 77-year reign as the world's top selling automaker in 2008, but it has not been immune to the global economic downturn and expects its first ever loss in the current financial year to March.

Source: AFP

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