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Troubled Toshiba plans to eliminate negative net worth by selling Westinghouse claims to U.S. hedge fund

KYODO Toshiba Corp. said Thursday it is set to eliminate its negative net worth and improve its finances by some ¥410 billion ($3.68 billion) after agreeing to sell its claims in its now-bankrupt U.S. nuclear unit to a U.S. hedge fund.

The company has agreed to sell claims related to Westinghouse Electric Co. to the Baupost Group LLC for $2.16 billion, with the transaction set to be completed by the end of the month. Westinghouse-related shares will be sold by the end of March to Canada’s Brookfield Business Partners LP, which will acquire the U.S. nuclear unit.

The value of Westinghouse itself is $1 after it filed for Chapter 11 bankruptcy protection in March.

Following the sale of Westinghouse-related claims and shares, Toshiba will likely secure net assets of ¥270 billion.

Toshiba had projected its negative net worth would stand at some ¥750 billion at the end of March, but raised ¥600 billion through a third-party allocation of new shares last month, effectively removing the risk of delisting. But it still needed cash to improve its financial standing.

The Japanese conglomerate is also looking to complete the sale of chip unit Toshiba Memory Corp. by the end of March to further improve its dire financial standing. The sale, announced in September to a consortium led by U.S. fund Bain Capital, has been reported to be worth roughly ¥2.4 trillion.

Toshiba Memory is currently going through antitrust screenings in multiple countries.


January 19, 2018 - Posted by | business and costs, Japan

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