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Toshiba completes sale of Westinghouse claims, replenishes finances

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Toshiba said on Tuesday it has completed the sale of its claims against bankrupt US nuclear unit Westinghouse Electric, a move that allows the Japanese conglomerate to replenish its depleted capital base and remain listed.

[TOKYO] Toshiba said on Tuesday it has completed the sale of its claims against bankrupt US nuclear unit Westinghouse Electric, a move that allows the Japanese conglomerate to replenish its depleted capital base and remain listed.

The US$2.16 billion sale, to a group of hedge funds led by the Baupost Group, will also come with tax benefits and improves Toshiba's balance sheet by about 410 billion yen (S$4.9 billion).

Liabilities at Westinghouse plunged Toshiba into crisis last year, and the beleaguered Japanese firm put up its prized memory chip business - the world's second-biggest producer of NAND memory chips - for US$18 billion.

Toshiba also plans to transfer its stake in Westinghouse to Canada's Brookfield Business Partners for US$1 by March 31. Both deals will help clear a path for Westinghouse to emerge from bankruptcy.

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The sale of the claims and a new share issue worth 600 billion yen to overseas funds have helped Toshiba avoid falling into negative net worth for a second consecutive year, allowing it to remain a listed company.

The funds have also meant that it faces less pressure to complete the sale of the chip unit to a consortium led by US private equity firm Bain Capital and some shareholders are pushing Toshiba to reconsider.

Toshiba, however, is sticking with its efforts to complete the sale of the chip unit by the end of March, saying it needs to further bolster the capital base.

REUTERS

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