Michael Rehfeldt via flickr
Toshiba spoke about a possible division of business in March, and today the company’s management has officially confirmed these plans. By July 1, Toshiba will identify three subsidiaries, covering three main business areas: the Infrastructure System (including water purification and railways), Storage & Electronic Devices and Industrial Information and Communication Technology. Three months later, another subsidiary, Energy Systems & Solutions (electricity generation, including thermal and nuclear power plants) will appear. The unit for the production of memory chips will be sold within the framework of the restructuring,. Among the potential buyers are Broadcom, Foxconn, Western Digital and SK Hynix.
Such a large-scale reorganization became an urgent necessity. Problems with its US unit for the construction of Westinghouse Electric have been growing like a snowball and nearly led to collapse of all Toshiba. Last December, Westinghouse Electric acquired assets of CB&I Stone & Webster, but the costs associated with this deal turned out to be higher than expected and reached several billion dollars, which had a negative impact on Toshiba's financial results. Trying to cope with the situation, the Japanese corporation delayed publication of the financial report twice for the last quarter of 2016, its shares in early 2017 fell by 26%, and rating agencies lowered the company’s credit rating several times. Finally, Westinghouse Electric announced launch of bankruptcy proceedings on March 29. On April 11, Toshiba finally summed up the results of 2016, saying that the corporation’s losses amounted to $ 5.2 billion.
Toshiba’s management expects that the division of business into four companies will strengthen each of them and increase efficiency. Individual companies will be more flexible in finding and mastering new opportunities, according to Toshiba. Shares of the company at today's auction in Tokyo reacted to the news by an increase of 1.1%.
For the three-month period ended for the company on December 31, 2016, Toshiba's net loss amounted to 647.8 billion yen (about $ 5.6 billion), which is 25% more than the cash losses of the last three months of 2015. Toshiba's revenue reached 1.27 trillion yen ($ 10.9 billion), slightly down year-on-year.
Earlier, the Japanese concern announced a projected loss of 1.01 trillion yen ($ 9.2 billion) following the results of the financial year ending March 31. As stated in the company’s financial statements, Toshiba has lost 576 billion yen ($ 5.2 billion) in April-December 2016.
Against the backdrop of Westinghouse's growing losses, the company put semiconductor business on sale and is planning to conclude a deal by June 2017. Toshiba expects to sell part of its memory chip business, earning at least $ 9 billion, which will help offset losses from Westinghouse Electric.
The semiconductor business of Toshiba is the world’s second largest. Analytical agency HIS says that in the II quarter of 2016, Toshiba controlled 20.4% of the world NAND flash memory market in terms of revenue, second only to Samsung Electronics (34.9% share).
source: japantimes.co.jp
Such a large-scale reorganization became an urgent necessity. Problems with its US unit for the construction of Westinghouse Electric have been growing like a snowball and nearly led to collapse of all Toshiba. Last December, Westinghouse Electric acquired assets of CB&I Stone & Webster, but the costs associated with this deal turned out to be higher than expected and reached several billion dollars, which had a negative impact on Toshiba's financial results. Trying to cope with the situation, the Japanese corporation delayed publication of the financial report twice for the last quarter of 2016, its shares in early 2017 fell by 26%, and rating agencies lowered the company’s credit rating several times. Finally, Westinghouse Electric announced launch of bankruptcy proceedings on March 29. On April 11, Toshiba finally summed up the results of 2016, saying that the corporation’s losses amounted to $ 5.2 billion.
Toshiba’s management expects that the division of business into four companies will strengthen each of them and increase efficiency. Individual companies will be more flexible in finding and mastering new opportunities, according to Toshiba. Shares of the company at today's auction in Tokyo reacted to the news by an increase of 1.1%.
For the three-month period ended for the company on December 31, 2016, Toshiba's net loss amounted to 647.8 billion yen (about $ 5.6 billion), which is 25% more than the cash losses of the last three months of 2015. Toshiba's revenue reached 1.27 trillion yen ($ 10.9 billion), slightly down year-on-year.
Earlier, the Japanese concern announced a projected loss of 1.01 trillion yen ($ 9.2 billion) following the results of the financial year ending March 31. As stated in the company’s financial statements, Toshiba has lost 576 billion yen ($ 5.2 billion) in April-December 2016.
Against the backdrop of Westinghouse's growing losses, the company put semiconductor business on sale and is planning to conclude a deal by June 2017. Toshiba expects to sell part of its memory chip business, earning at least $ 9 billion, which will help offset losses from Westinghouse Electric.
The semiconductor business of Toshiba is the world’s second largest. Analytical agency HIS says that in the II quarter of 2016, Toshiba controlled 20.4% of the world NAND flash memory market in terms of revenue, second only to Samsung Electronics (34.9% share).
source: japantimes.co.jp