Toshiba Set to Erase Negative Net Worth (News)


Tokyo, Jan. 18 (Jiji Press)—Toshiba said Thursday it expects to erase its negative net worth by the end of March as the company has agreed to sell to a US consortium its claims against Westinghouse Electric, a failed US nuclear business unit.

The sale of the claims, to be completed this month, will improve the major Japanese electronics and machinery maker's capital base by ¥410 billion. This breaks down into ¥170 billion in proceeds from the sale and a tax burden reduction worth ¥240 billion.

With the latest deal, combined with a ¥600-billion capital increase conducted last year, Toshiba said it will be able to pay off its excess debts, which are expected to reach ¥750 billion as of the end of March 2018.

Due to massive losses from the US nuclear unit, Toshiba plunged into a negative net worth, a situation in which debts exceed assets, at the end of March 2017.

Toshiba will be delisted from the Tokyo Stock Exchange if it fails to resolve the negative net worth by March 31 this year. Under TSE rules, shares of a company posting a second straight year of negative net worth are to be delisted from the exchange.

[Copyright The Jiji Press, Ltd.]

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