JAPAN TODAY



 

 
TOKYO - Toshiba Corp said Monday it will spin off four key operations including its infrastructure systems to keep its shaky financial standing from affecting its healthy businesses.

Roughly 24,000 of some 30,000 Toshiba employees are likely to be transferred to the newly established companies. Engineers in the research and development division and some administrative staff will remain employees of Toshiba.

The company is planning to spin off its infrastructure systems, energy systems, information technology-related businesses and electronic device operations.

Toshiba's financial problems are clouding the prospects for a renewal in December of a government permit that allows the company to undertake large-scale construction projects, according to sources familiar with the matter. Such permits are revoked if companies cannot meet capital and other financial requirements.

Toshiba hopes to avoid losing large infrastructure building and energy system contracts by separating the key business divisions from the parent company.

Toshiba also wants to ensure that it will continue to be involved in decommissioning of the crisis-hit Fukushima Daiichi nuclear power plant which was devastated by the March 2011 earthquake and tsunami.

The company is aiming to gain approval of the plan at a shareholders' meeting in late June and spin off three divisions in July and the energy system division in October.

Toshiba is in the midst of a severe financial crisis caused by losses at its U.S. nuclear unit Westinghouse Electric Co. that filed for Chapter 11 bankruptcy protection last month. Toshiba has already sold its medical business and spun off its chip operation.

The company said last month it could post a group net loss of 1.01 trillion yen ($9.1 billion) for the fiscal year ended March 31, the largest ever for a Japanese manufacturer, and fell into a negative net worth of 620 billion yen at the end of March due to losses in the U.S. nuclear power business.



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