Toshiba may need to spin-off or list semiconductor business as part of equity financing to counter nuclear business loss
Toshiba could be forced to carry out a review of its businesses, including spinning-off or listing its semiconductor business, as part of equity financing, the Nihon Keizai Shimbun reported.
The Japanese-language report cited Yoshiharu Izumi, an analyst at Tokyo-based investor media management company Navigator Platform, as saying that there is a possibility Toshiba could decide to sell-off its semiconductor business. Izumi added that investors ought to be strongly cognizant of the many uncertain elements of Toshiba's brands that have little growth prospects.
Toshiba announced on 27 December that it may have to book several hundreds of billions of JPY (several billion USD) of goodwill in connection with the acquisition of CB&I Stone & Webster by subsidiary Westinghouse Electric. Chief executive Satoshi Tsunakawa disclosed at a press conference on the same day that the company would have to consider the positioning of its nuclear business.
Meanwhile, a related report in the same paper noted that as a result of the goodwill problem Toshiba would likely need to increase its equity capital from the just more than JPY 330bn it had as of the end of September 2016. Should the company’s debts exceed its equity capital, Toshiba, which is on the Tokyo Stock Exchange’s 'Securities on Alert' List, would need to rectify the problem by the end of the fiscal year to avoid being delisted, the report said.