Tokyo-based Toshiba announced on 24 April a reorganisation of its business structure, including plans to split its four in-house companies into wholly-owned subsidiaries, with its nuclear energy unit being combined with its energy business.
Toshiba hopes that this will enable it to maintain special construction business licences with the Japanese government since big construction projects have rules on how much capital or shareholder equity a company needs. Toshiba had warned earlier in April that its ability to stay in business was at risk as a result of the huge losses incurred by its US-based nuclear business Westinghouse Electric Company, which was put into Chapter 11 bankruptcy protection in March.
From 1 July, the company’s Infrastructure Systems, Storage & Devices, and Industrial Information and Communication Technology units become three of the four planned independent business entities. The from 1 October, the company will transfer its Energy Systems and Nuclear Energy Systems (both in-house companies) into a new company, which will obtain special construction business licences in order to “maintain business continuity in respect to its ability to engage in businesses that require such licences”. The new company also "aims to realise further growth for the energy business by offering products, systems and services that improve customer value in next generation energy sources".
The restructuring aims to satisfy requirements to get its licence renewed for big construction projects that have rules about how much capital or shareholder equity a company needs. Toshiba filed a twice-delayed third quarter earnings report in April despite having failed to gain a sign-off from its auditors. The nine months ending in December showed a JPY532.5bn ($4.7bn) loss. Toshiba has warned that full-year loss could exceed JPY1000bn. The results are due in May. The company is still in the process of finding a buyer for its memory chip division.
