Effissimo says expects long-term price gains with Toshiba stake purchase

[TOKYO] Singapore-based fund Effissimo, which has given embattled Toshiba Corp a rare vote of confidence with its purchase of 8 per cent stake this month, said on Friday the holding was for pure investment purposes and it expected long-term price gains.

The fund, established by former colleagues of Japan's most famous activist investor, Yoshiaki Murakami, has now become the largest shareholder in Toshiba which is caught up in a multibillion dollar financial maelstrom surrounding its US nuclear unit Westinghouse.

Effissimo's unexpected purchase sent shares in the Japanese conglomerate soaring 7.6 per cent on Friday, giving it a market value of 944 billion yen (S$11.9 billion). The stock has halved in value since mid-December, hit by a growing list of financial woes that have put it at risk of delisting.

"Given the tumultuous background of what's been going on, at least this brings a degree of something tangible to shareholders and investors, in relation to the probability of some stability going forward," said Gavin Parry, managing director of Parry International Trading in Hong Kong, who does not hold any Toshiba shares.

Effissimo's purchase of 8.14 per cent of Toshiba is worth about 65 billion yen, based on its closing price on March 15, the date of ownership shown in the filing.

Its stake is "purely for investment", the fund said in an emailed statement.

Effissimo is also the largest shareholder in shipper Kawasaki Kisen Kaisha Ltd, office equipment maker Ricoh Co Ltd and electronics retailer Yamada Denki Co Ltd.

Hit by cost overruns at two US nuclear projects, Toshiba has flagged a US$6.3 billion writedown and is also looking at selling a majority stake in Westinghouse, in addition to the sale of its memory chip unit.

REUTERS