Toshiba Splitting Off Four of its Companies into Wholly Owned Subsidiaries
Toshiba Corporation of Tokyo, Japan, announced today that it will be splitting off four of its inhouse companies into four wholly owned subsidiaries in an effort to maintain special construction business licenses with the Japanese government.
Earlier this month, Toshiba had warned that its ability to continue as a growing concern was in peril after it reported significant losses at its U.S. nuclear business Westinghouse Electric Company, which has filed for Chapter 11 bankruptcy protection.
On July 1, 2017, Toshiba will split off these groups into into three wholly owned subsidiaries: Infrastructure System, Storage & Electronic Devices, and Industrial Information and Communication Technology. Three months after that, the Energy Systems & Solutions company will be split off and transferred into a new company.
Toshiba is also selling its memory-chip business, with Reuters reporting that the most likely buyers are either Broadcom (AVGO) , Foxconn, Western Digital (WDC), or SK Hynix.
Toshiba said the restructuring is an effort to get its license renewed for construction projects in Japan, as the Japanese government specifies how much capital or shareholder equity a company must have in order to qualify for such projects
For its nine-month fiscal period that ended on December 31, 2016, Toshiba reported a loss of ¥532.5 billion ($5.9 billion) loss. It’s also warned that its full-year loss could be over ¥1 trillion, and is expected to report its financial results next month.
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