On Thursday, for its plan to reclaim Investors confidence, Toshiba buy back its stocks, job cutting and assets selling.
Part of its new five year strategy for re structuring, Toshiba will scrap its nuclear power unit in Cumbria, England by next year. Toshiba has also reach to agreement to sell its liquefied natural gas (LNG) business in Texas, United States to China’s ENN by March 2019. And from Friday, it will start to repurchase 40 percent of its own share. For years, Toshiba has been striving hard to win the market’s trust back which was badly shaken in 2015 by an accounting scandal of major irregularities. In result Toshiba had to bear heavy cost overruns upon Westinghouse which later on declared bankrupt in 2017.
Consequently earlier this year Toshiba has off loaded the U.S. based nuclear unit to Canadian Brookfield for $4.6 billion. To overcome the losses, Toshiba also sold it award winning Memory Chip business to Bain Capital, an equity firm, in deal worth about $18 billion.
Toshiba has also been shedding its disturbing assets leaving a least chance of its exposure to future losses.
For 18 months Toshiba’s negotiations with several potential buyers of its British unit NuGen remained unsuccessful and now finally it decided to wind up. This decision will surely affect the Britain’s nuclear intentions to cover 7 percent of its power requirement. After Toshiba’s decision now the fate of nuclear plant in Cumbria is in the hand of British government and its Nuclear Decommission Authority.
For LNG business, Toshiba is selling it to the ENN Ecological Holdings which is a subsidiary of gas producing ENN Group of China. $821 million will be paid to the buyer by Toshiba being amount of already charged in the books for current year for assumption upon purchase of 2.2 million tons per year from Freeport LNG in Texas for year 2018.
Toshiba is expecting operating profit of 240 billion yen in 2021 against this year 60 billion yen, after implementation of its new strategy.