Toshiba Toshiba

Over the 146 years of its history, the company has become a multinational corporation and has become one of the world's largest manufacturers of electronics and electrical engineering.

Structure

By June 2020, Toshiba Group has released detailed information on the reorganization of its structure, which the company intends to begin in fiscal 2019, as part of a policy of consolidating its divisions and simplifying the hierarchical structure. It is planned to reorganize and consolidate business units in key companies of the group:

• Toshiba Energy Systems & Solutions Corporation. The task is to become one of the world's leading companies operating in the region. Cyberphysical Systems (CPS) Such companies can assemble data from the physical world for analysis in the virtual world of digital technology, and then use them to benefit through constant feedback between them. The company includes power the Power Systems Division and the Grid Aggregation Division.

• Toshiba Infrastructure Systems & Solutions Corporation. The company includes the Social Systems Division.

• Toshiba Electronic Devices & Storage Corporation. The company includes the System Devices Division and the European division of Toshiba Electronics Europe (TEE).

• Toshiba Digital Solutions Corporation. The company includes the ICT Solutions Division, which works in the field of artificial intelligence and the Internet of Things solutions.

Also, after the sale of the Toshiba Memory division, the company retained a 40.2% stake in the new Toshiba Memory Corporation (TMC), based on this division.

Performance indicators

Main article: Toshiba's financial performance

2020: Revenue - 3.05 trillion yen, profit - 114 billion yen

In fiscal 2020, Toshiba's revenue amounted to 3.05 trillion yen (about $27.5 billion at the exchange rate at the time of publication - May 14, 2021 of the calendar year) against $3.39 trillion yen a year earlier.

Toshiba's core business remains concentrated in Japan. There, the company's revenue at the end of the 12-month period, closed on March 31, 2021, reached 1.78 trillion yen, which is 11% less than a year ago. In the rest of the countries combined, the conglomerate's turnover also decreased - by 8%, to 1.28 trillion yen.

Annual sales in Europe sank the most: in 2020, they amounted to 182.73 billion yen, which is 13% less than a year earlier. In North America, revenue decreased by 7% (to 293.5 billion yen), in Asia excluding Japan - by 5% (to 714.38 billion yen).

In the Energy Systems & Solutions division, annual revenue was 493.2 billion yen, down 13% year-on-year. In the direction of Electronic Devices & Storage Solutions, sales reached 711.34 billion yen, which is 5% less than in 2019.

In the business of producing infrastructure products, there was a 9 percent decline in income, to 670.89 billion yen. Technology sales for buildings decreased by 4%, to 545.18 billion yen. Least of all, judging by the financial parity, Toshiba brings digital solutions - they added about 221.74 billion yen to annual revenue, which is 12% less than in 2019.

Despite the decline in sales, the Japanese corporation was able to get rid of losses by recording a net profit of 114 billion yen ($1 billion). The return of profits was largely because the 2019 financial report included losses from the transfer of the LNG business and investments in memory chip maker Kioxia.

Toshiba's total debt by March 31, 2021 amounted to 517.7 billion yen.^[1]

Business in Russia

Main article: Toshiba Rus

History

2023

Leaving Tokyo Stock Exchange

On December 20, 2023, a consortium of investors led by Japan Industrial Partners (JIP) completed a takeover of Toshiba. As part of the agreement, the corporation was excluded from the listing of the Tokyo Stock Exchange, where its shares were listed for 74 years.

According to Reuters, the $14 billion deal puts an end to the turmoil and trouble that has accompanied Toshiba for about 10 years. So, in 2015, a scandal erupted with financial reporting: it turned out that the indicators were falsified for several divisions, and the top management was involved in this proceedings. Toshiba overestimated pre-tax profits by 230 billion yen ($1.62 billion at the exchange rate as of December 22, 2023) for a seven-year period. This was followed by problems with the American division of Westinghouse Electric, and in January 2020, accounting violations were found in the subsidiary.

In April 2021, CVC Capital Partners made an offer to buy out Toshiba: the value of the transaction could be up to $21 billion, but the corporation refused to conclude an agreement. In 2022, negotiations on the sale of Toshiba resume - among the potential buyers are private investment firms Bain Capital, CVC Capital Partners and a consortium with the participation of JIP. The latter was the winner: the sale of Toshiba was approved in March 2023.

Under the terms of the contract, Toshiba CEO Taro Shimada will retain his post, but the composition of the board of directors as a whole will be revised. The board, in particular, will include four representatives of JIP, another place will go to the investment firm Orix and the energy company Chubu Electric Power. As of late December 2023, there is no clarity on what form Toshiba will eventually take. But it is noted that the corporation will focus on highly profitable areas of activity related to digital technologies.^[2]

Printer Division Merger with Ricoh

On May 19, 2023, Toshiba and Ricoh announced an agreement to merge their structures involved in the development and production of printers, copiers and other office equipment. Read more here.

Investment companies buy Toshiba for $15.2 billion

On March 23, 2023, it became known that the Japanese corporation Toshiba had found a buyer for its assets. The corresponding proposal came from a consortium of investors led by the Japan Industrial Partners (JIP) fund.

According to Nikkei, the transaction amount will be approximately 2 trillion yen (about $15.2 billion at the exchange rate as of March 23, 2023), or 4620 yen per security. This is 9.7% more than the market value of Toshiba shares at the time of receipt of the purchase offer. Once the takeover is completed, Toshiba is expected to be transformed into a private company.

Toshiba's board of directors has already accepted the purchase offer: it says it reflects the interests of both the corporation itself and shareholders. A deal would require the necessary regulatory approvals in advance. After that, JIP will buy the securities from existing shareholders. It is planned to finance the acquisition through investments from about 20 Japanese companies, including Orix, Rohm and Chubu Electric Power, as well as by obtaining bank loans. Ultimately, the goal is to add value to Toshiba's assets through collaboration with investor companies.

This agreement could put an end to the long series of shocks faced by Toshiba. The fact is that the management of the corporation, the Japanese government and foreign shareholders disagree on the future of the company. In particular, investors seek to maximize profits, while the state gives priority to ensuring that strategically important technologies do not fall into the hands of foreign structures. In particular, Toshiba nuclear power is considered important for national security. The transaction was also hindered by the current macroeconomic situation and the scandal with falsification of accounting documents in 2015.^[3]

2022

Toshiba, Sony and Samsung will pay tens of millions for cartel collusion in the sale of disk drives

On June 16, 2022, it became known that Toshiba Samsung Storage Technology, Sony, Sony Optiarc and Quanta Storage lost a lawsuit with the EU and must pay fines totaling €116 million ($120.5 million). Read more here.

Toshiba put itself up for sale

On April 21, 2022, the management of the Japanese corporation Toshiba announced the start of collecting applications for "strategic alternatives, including privatization, from potential investors and sponsors." Nomura Securities investment bank has been chosen as the financial adviser in the search for buyers and consideration of applications. Applications will be accepted until Toshiba's general meeting of shareholders, which will be held in June, the company said.

The actual announcement of the sale of the company led to an increase in its shares on the Tokyo Stock Exchange by almost 5%. The stock market saw the announcement as positive news.

A year ago, Toshiba received a purchase offer from the CVC Capital Partners investment fund. The volume of the transaction could be about $20 billion, but it did not take place, as the board of directors "decided to abandon it."

Taro Shimada is Toshiba's new CEO

On March 1, 2022, Japanese technology company Toshiba announced that its board of directors had decided that the chief executive and senior vice president of the corporation, Taro Shimada, would replace Satoshi Tsunakawa as CEO. The chapter change comes as the conglomerate seeks shareholder approval of a restructuring plan aimed at restoring the reputation and competitiveness of the business. Read more here.

Shareholders reject plan to split into two companies

In February 2022, Toshiba revised its restructuring plans and instead of three companies decided to split into two: Infrastructure Service Co. and Device Co. The former will be responsible for infrastructure systems and solutions, digital solutions, as well as batteries and chips within the Kioxia Device Co. business. It will develop the sector of power semiconductors, electronic devices and storage, high-capacity hard drives and analog integrated circuits.

The abandonment of the original plan comes after criticism from shareholders, including Toshiba's second-largest investor, Singapore-based 3D Investment Partner. In January 2022, he stated that the restructuring that Toshiba wanted to carry out initially was the result of imperfect business, which could not solve the main problems in the Japanese corporation.

Toshiba was set to spin off as a separate company and sell its device division, including semiconductors, according to The Wall Street Journal. Toshiba estimates that splitting into two companies will maintain financial stability than the original plan to spin off the three companies. The split is expected to be completed by March 2024.

Toshiba has identified its electronic equipment division Toshiba Tec Corp. as a non-core business, but the company has not announced plans to sell it. Toshiba plans to sell its elevator and lighting business.

In addition, Toshiba will sell a 55% stake in Toshiba Carrier Corp., an air conditioner company, to its partner Carrier Global Corp. of. USA A certain stake in Kioxia Holdings Corp, which manufactures flash memory, will remain under Toshiba's control, but the company plans to sell them in the future in order to return the funds to shareholders.^[4]

It later became known that Toshiba shareholders did not support the plan to split into two companies. According to media reports, shareholders called for an investor who could buy the entire company, which management followed.

2021

Plan to split into three companies

In mid-November 2021, Toshiba announced a restructuring that would split the conglomerate into three separate companies:

• Infrastructure Service: It will include Toshiba Energy Systems & Solutions, Infrastructure Systems & Solutions, Building Solutions, Digital Solutions, and battery business;
• Device: Toshiba Electronic Devices & Storage Solutions will be the basis of this company;
• Toshiba: A company under this name will manage memory chip makers Kioxia Holdings (Toshiba owns a 40% stake in the company by November 2021), as well as office and retail equipment maker Toshiba Tec.

It is explained that Infrastructure Service will combine Toshiba's infrastructure and energy operations. It will also include advanced industrial technologies such as the Internet of Things, manufacturing automation, smart networks and quantum computing.

Device will run Toshiba's electronic devices and storage solutions business. This is the production of semiconductors, analog integrated circuits, as well as large-capacity hard drives for data centers.

The management of the Japanese corporation believes that restructuring will help it achieve greater flexibility to solve non-standard problems at a difficult time for the market. The split is expected to be completed by the second half of fiscal 2023.

Toshiba is confident that its divisions can be more accurately evaluated if they become separate companies. Investors often underestimate large conglomerates because they are harder to understand from outside, and because it is harder for a CEO to run a complex organization than one with a clearer focus.^[5]

Refusal to sell the British company CVC Capital Partners for $20 billion

On April 20, 2021, Toshiba rejected an offer from British investment firm CVC Capital Partners to acquire the Japanese conglomerate. The possibility of concluding a deal worth $20 billion was discussed.

According to a statement from Toshiba, the corporation received a letter from CVC stating the fund's readiness to suspend plans to buy the Japanese company so that the board could assess whether the deal fits into the company's long-term development strategy. Toshiba noted that this letter "did not contain detailed information about the buyer's capital structure, his policies after the purchase, as well as information about how he would resolve the issue with national regulators." Since such a proposal does not include this important information, Toshiba's board of directors decided to abandon it. Toshiba thus pulled out of the deal.

CVC offered to buy Toshiba earlier in April 2021. As the Nikkei edition notes, there have been few cases in history when one of the most famous Japanese companies decided to leave the public markets in order to avoid control by shareholders. Toshiba intends to take this step to speed up its decision-making processes. The company is constantly under pressure from investors amid a series of scandals and large losses over the past few years.

Investment firm KKR & Co. is considering buying Toshiba and plans to offer the company more than CVC, according to Bloomberg. Canadian investment giant Brookfield Asset Management is also showing preliminary interest in acquiring Toshiba, the news agency reported.

Toshiba said it would continue to review and evaluate any credible proposals. But the public company's status provides it with a "stable capital structure," Toshiba said in a statement.^[6]

2020

Toshiba sold all PC assets and left the laptop market

On August 7, 2020, Toshiba announced the sale of its remaining 19.9 percent stake in the computer business. The assets were acquired by the Japanese company Sharp, becoming the owner of 100% of the Dynabook division (formerly Toshiba Client Solutions). Read more here.

4-day week and fewer office workers. How Toshiba will work after the pandemic

On May 5, 2020, it became known that at the end of the quarantine associated with the spread of the COVID-19 coronavirus, Toshiba will transfer about 10 thousand of its employees in Japan working at production sites to a 4-day working week.

The company plans to resume the work of factories in Japan no earlier than June 2020. At the same time, the duration of working days will increase so that the monthly amount of working time - 160 hours - remains the same, and the salary of workers does not decrease. This is the result of the company's negotiations with local unions.

In total, Toshiba employs about 76 thousand people in Japan. The remaining 66 thousand are employees not related to production.

The reduction in the number of people going to work and the number of trips to enterprises is part of the broader measures that Toshiba is taking to contain the spread of the coronavirus.

Toshiba suspended operations of its Japanese divisions from April 20, 2020 to May 6, 2020, postponing the summer holidays for a long period of spring weekends, referred to as Golden Week. When Toshiba resumes operations on May 7, 2020, flexible working hours will be introduced for some employees.

For example, engineers who process large amounts of project data cannot fully perform their tasks while at home. The new system will allow them to be in the office less often.

Administrative staff and sales managers will continue to work remotely, from home. The company did not specify when they could return to their jobs.^[7]

2019

Net losses - 114.6 billion yen

For fiscal year 2019, which ended at the end of March 2020 for Toshiba, the Japanese conglomerate raised 3.39 trillion yen ($31.05 billion), which is 8.2% higher than a year ago due to revenue growth in many divisions.

The corporation's net loss was 114.6 billion yen ($1.05 billion) against the profit of 1.013 trillion yen recorded a year earlier. True, that large profit is associated with a one-time inflow of income - from the sale of a controlling stake in the semiconductor division of Toshiba Memory.

The company suffered losses from the sale of its gas and semiconductor business in fiscal 2019, Toshiba said in a statement. With the exception of special factors, such as restructuring costs and the impact of the COVID-19 pandemic, profits from core operating activities doubled to 161.6 billion yen.

The Energy Systems & Solutions division in 2019 financial year recorded revenue of 568.8 billion yen against 652.7 billion yen a year earlier. In the direction of Infrastructure Systems & Solutions, annual turnover increased from 733.5 to 735 billion yen.

Toshiba's construction business (the Building Solutions division is responsible for it) in 2019 Fin showed revenue of 570.1 billion yen, which exceeds the one-year-old figure of 733.5 billion yen.

Sales at Retail & Printing Solutions increased year-on-year from 485.4 billion yen to 490.4 billion yen. In the division for the production electronic engineers and devices for data storage sale decreased - from 933 billion yen in the 2018 reporting year to 745.6 billion yen a year later. Another business - Digital Solutions - recorded a slight decrease in revenue for the 2019 fiscal year, it amounted to 252.4 billion yen.Toshiba 2019 Financial Statement

Mass layoffs as part of restructuring

On May 13, 2019, Toshiba announced mass layoffs as part of a restructuring aimed at restoring the Japanese giant's financial health.

Toshiba spoke about the liquidation of working positions in a document that reflects the reporting for fiscal year 2018. According to the materials released, by the end of March 2019, 823 employees had quit, agreeing to an early retirement program.

Toshiba also intends to cut 350 jobs in the semiconductor business, which is suffering from falling demand for chips in China. By the end of March 2024, it is planned to lay off a total of 7 thousand people.

After the accounting fraud scandal and the bankruptcy of a subsidiary of Westinghouse Electric, Toshiba is reorganizing its operations. Several assets have been sold and cost-cutting measures implemented, however the tech giant is still looking for new revenue growth drivers after selling the lucrative semiconductor business.

Although the corporation still has a voting share in the sold "daughter" Toshiba Memory, the Japanese giant has ceased to pay attention to it. Instead, he focused on energy and infrastructure products, as well as electronic equipment. In addition, a new business for the production of lithium-ion batteries for cars was launched.

Toshiba is undergoing a restructuring that is reducing the company's sales, but it should improve profitability, said Nobuaki Kurumatami, chairman of the board of directors and CEO of the company.

 As part of the restructuring, Toshiba proposed a list of nominations for board members, including seven new independents and five international board members. These nominations will be considered at the AGM on June 26, 2019.^[8]

Structure Reorganization

On January 15, 2019, Toshiba Group released detailed information on the reorganization of its structure, which the company intends to begin in fiscal 2019, as part of a policy of consolidating its divisions and simplifying the hierarchical structure.

1. Creation of the Department for the Development of New Business Lines

The Department will perform two complementary functions: accelerating business development through its own technology assets and funding an active study of external resources, seeking information and obtaining expert assessments using the Corporate Venture Capital Fund (CVC). CVC's fund is 10 billion yen (over US $92.5 million). These funds will be used to invest startups in Japan and abroad in areas where synergies can be achieved involving the Group's growing business - for example, in power, logistics and life sciences - as well as venture capital funds with experience in these sectors.

2. Reorganize and consolidate business units in key group companies

Toshiba Energy Systems & Solutions Corporation

The Business Design Project Team at Toshiba Energy Systems & Solutions Corporation will consolidate the resources of all divisions of the company and will help accelerate the development of businesses related to the transition to digital technologies.

The move aligns with Toshiba Group's strategy to become one of the world's leading cyberphysical systems (CPS) companies. Such companies can collect data from the physical world for analysis in the virtual world of digital technology, and then use it to benefit through constant feedback between them.

On April 1, 2019, Toshiba Energy Systems & Solutions Corporation will merge in its structure power engineering specialists the Nuclear Energy Systems & Services Division and the Thermal & Hydro Power & Services Division into the established power Power Systems Division. In turn, the Transmission & Distribution Systems Division and the Energy Aggregation Division will be merged into the Grid Aggregation Division.

Компания Toshiba Infrastructure Systems & Solutions Corporation

Toshiba Infrastructure Systems & Solutions Corporation will merge the Water & Environment Systems Division and the Social Systems Division into the Social Systems Division. These two divisions are already operating on the basis of common basic technologies, sales channels and service, which will help optimize both the business itself and the management structure.

Toshiba Electronic Devices & Storage Corporation

Toshiba Electronic Devices & Storage Corporation will merge the Mixed Signal IC Division and Logic LSI Division into the System Devices Division. As a result of the consolidation, the BIS technologies of analog and digital systems will be combined, which have developed in parallel in their respective departments. The company will strengthen management by sharing and redistributing development resources, thus strengthening the core business and promoting more efficient use of common functions.

Toshiba Digital Solutions Corporation

Toshiba Digital Solutions Corporation will merge the Government & Public Corporation Solutions Division and the Industrial Solutions Division into the ICT Solutions Division. The company will more effectively use resources for artificial intelligence and IoT technologies, as well as promote advances in CPS and the digital transition.

3. Reorganization and Closure Materials and Devices Division

Toshiba will relocate the Group's business, operations and affiliates managed by the Materials & Devices Division to the Group's respective departments to strengthen their operations and ensure quick decision-making.

2018

Getting rid of problem assets and dismissal of 7 thousand people

On November 8, 2018, Toshiba announced the sale of distressed assets and the reduction of 7 thousand jobs, which corresponds to 5% of the state. The layoff program will run for five years.

Japanese conglomerate sells US liquefied natural gas (LNG) business  to Chinese gas company ENN Ecological for $15 million However, after the closing of the transaction, scheduled for the end of March 2019, Toshiba will have to transfer ENN about $821 million as a commitment to acquire 2.2 million tons of LNG over 20 years from Freeport LNG in Texas. The total value of the contract is $7 billion.

The project poses a huge risk because no one knows what the situation will be in 20 years, Toshiba CEO Nobuaki Kurumatani told reporters.

Toshiba has already accounted for the costs of exiting the LNG business in the United States in the financial statements for the first half of the financial year. As the news agency notes, Reuters Toshiba has spent years selling to gas customers power engineering specialists in the field or getting rid of the business.

Toshiba also announced the elimination of the British nuclear unit NuGen. This project involved the construction of the Moorside Nuclear Power Plant in Britain, and Toshiba's decision raises doubts about the country's further plans to use new nuclear power to replace capacity power that will be lost due to the closure of coal-fired power plants, which will close in the coming years.

The statement about mass layoffs, disposal of assets, as well as plans to buy back up to 40% of the shares favorably affected Toshiba's quotes. On November 8, 2018, the company's shares rose by 12.7%, according to data from the Tokyo Stock Exchange. In the process of trading, the rise in quotations reached 13.7% - the highest mark in the previous two years.^[9]

Updated concept of "Essence of Toshiba"

On September 26, 2018, Toshiba Corporation introduced an updated concept, "Essence of Toshiba," containing rethought goals and values.

The concept will be applied throughout the group of companies as part of an initiative to harmonize and integrate various enterprises and processes around the world.

The concept of "Essence of Toshiba" was presented to employees of the corporation on July 1, 2018. Starting October 1, 2018, it will be used in all units of the group together with updated visual images. The rebranding will be carried out as part of a global advertising campaign, an updated digital and social strategy, as well as a full set of branded communication materials.

We at Toshiba believe that these strategic steps will help us lay a solid foundation for future prosperity. The updated concept reflects our commitment to making meaningful contributions to a world that is safer and cleaner and a society that is both sustainable and dynamic. We want to make people's lives comfortable and interesting by giving answers to questions that bring a great future closer.

Sale to Hisense of the TV direction Toshiba

On July 20, 2018, Hisense International Ltd announced two major deals: the acquisition of the television direction Toshiba and the manufacturer of household appliances Gorenje. Read more here.

Recall of 3.4 million power supplies due to fire

In June 2018, Toshiba announced a global recall of power supplies for computers. It turned out that the devices are prone to overheating and fire.

The service campaign includes more than 3.4 million power supplies for Dynabook laptops and other PCs. These products were produced from December 2009 to July 2011 and sold in Japan, the USA, Europe and other regions. Defective products have model designations of G-71C0009S210, G-71C0009T110, G-71C0009T210 or G-71C0009T116.

Over 517 thousand recalled power adapters fell on the Japanese market. At the same time, it is not specified who the manufacturer of poor-quality products is.

According to Kyodo, citing a statement from Toshiba Client Solutions, 11 cases of smoke and fire on power supplies have been registered in the three years since May 2015. No casualties were reported in these incidents.

According to the manufacturer, power supplies that fall under the reviews may have insufficient water resistance and ignite due to the decomposition of components. Toshiba has begun changing faulty computer components to new secure ones. Replacement is free of charge for customers.

Cases of overheating of power adapters, which led to a massive recall of Toshiba products, have happened before. So, in September 2010, the Japanese electronics manufacturer announced the need to repair 41 thousand laptops Toshiba Satellite T123, Satellite T135D and Satellite Pro T130, sold in the United States from August 2009 to August 2010. The recall was launched after 129 cases of overheating and deformation of plastic around the power connector were recorded. Including in two cases, consumers received small burns, and in two more properties, laptop owners suffered minor damage.^[10]

Sale of computer business to Sharp for 4 billion yen

In early June 2018 Japanese , the consumer electronic engineers and display manufacturer Sharp announced the purchase of Toshiba the computer business, thereby returning to the market, which left eight years earlier.

Sharp agreed to acquire an 80.1 percent stake in Toshiba Client Solutions, which develops and sells laptops, for 4 billion yen (about $36.47 million at the exchange rate as of June 5, 2018). The deal is scheduled to close by October 1.

The deal highlights Sharp's reinstatement under Foxconn, which bought the Japanese company in 2016, Reuters news agency noted. The collaboration with Foxconn is expected to help Sharp produce laptops at discounted prices relative to competitors, boosting demand and generating profits.

The agreement between Sharp and Toshiba is unusual, as Japanese companies, by contrast, are leaving the PC, smartphone and consumer electronics markets, including televisions, under the onslaught of South Korean and Chinese competitors.

Toshiba sells laptops and tablets for corporate customers and consumers under the Dynabook brand. Over the three financial years, by the end of March 2018, the company's calendar computer business accumulated operating losses of 97 billion yen, and sales decreased by 75% due to the fact that Toshiba stopped selling PCs abroad and brought the production of these products to Bloomberg outsourcing.

Toshiba continues to sell assets after losses resulting from an accounting scandal and write-offs in the nuclear business. Thus, the Japanese conglomerate sold businesses for the production of TVs, household appliances and semiconductors. The corporation is now focusing on sectors such as energy and social infrastructure, according to a statement from Toshiba.^[11]

Nobuaki Kurumatani - new CEO

On February 14, 2018, Nobuaki Kurumatani was appointed CEO of Toshiba. He will also head the board of directors of the Japanese corporation. Read more here.

Sale of Westinghouse for $4.6 billion and its debts for $2.16 billion

In January 2018, Brookfield Business Investment Corporation announced that it had acquired 100% of Westinghouse from Toshiba Corp. for $4.6 billion. The deal will be approximately $1 billion financed by equity, $3 billion - by long-term debt financing. Completion of the transaction is expected in the third quarter of 2018 and is subject to the approval of the bankruptcy court and other regulators.

In January 2018, it became known that Toshiba Corp. will sell the rights to claim the assets of its bankrupt American subsidiary Westinghouse Electric to a consortium of investors led by the American hedge fund Baupost Group, as well as shares of Westinghouse-related companies to the Brookfield investment fund.

According to a Toshiba press release, the company will sell claims on assets totaling about $8.1 billion for $2.16 billion. Toshiba expects to complete this transaction by the end of January 2018^[12].

All Toshiba-owned shares in Westinghouse-related companies, including shares in its U.S. holding company, will be sold to Brookfield, Westinghouse's likely future owner, for $1.

Toshiba expects to sell shares of Westinghouse-related companies to Brookfield by the end of March 2018.

The sale of claims on Westinghouse's assets will be reflected in Toshiba's statements for the current financial year, which will increase its equity by about 410 billion yen ($3.68 billion).

Earlier, the company predicted that at the end of this financial year, ending in March 2018, its net worth would be negative - 750 billion yen.

However, thanks to a 600 billion yen recapitalization carried out in December 2017 through the issuance of new shares, as well as capital gains through the sale of claims on Westinghouse assets, Toshiba expects its equity to be positive at the end of the year. That is expected to allow it to avoid delisting shares.

2017

Redemption of 10% of Westinghouse shares from Kazatomprom

In December 2017, it was announced that Toshiba bought 10% of the shares of its bankrupt subsidiary Westinghouse Electric from the national nuclear company (NAC) of Kazakhstan Kazatomprom in accordance with the condition of the put option agreement, the press service of Kazatomprom reported.

Kazatomprom acquired Westinghouse shares in 2007 from Toshiba Corporation for $540 million. According to the terms of the put option agreement, Kazatomprom had the right to sell its shares back to Toshiba Corporation at a fixed value of $522 million.

"Today, Kazatomprom received payment for Westinghouse shares in the amount of $522 million under the previously exercised put option right," the statement said.

The press release emphasizes that taking into account the dividends received during the period of ownership of the shares in the amount of $103 million, Kazatomprom made a return of the invested funds in the total amount of $625 million, which exceeded the initial investment in Westinghouse shares by $85 million.

TV business sale

On November 14, 2017, Toshiba announced the sale of the television business to the Chinese electronics manufacturer Hisense Group. The Japanese conglomerate continued to dispose of assets to restore its crippled financial position.

According to Agence France-Presse, citing a statement from Toshiba, the company is selling a 95% stake in Toshiba Visual Solutions, a division specializing in TVs, as well as audio and video equipment. Hisense agreed to pay 12.9 billion yen ($113.6 million) for this. Toshiba retained the remaining 5 percent share of the business.

Commenting on the deal, Toshiba called it part of "structural reforms" aimed at strengthening the corporation's "financial base."

Toshiba has become difficult to continue investing its organizational resources and implement measures to strengthen the competitiveness of the television business, the Japanese giant said in a statement.

Toshiba went into a deep loss after multibillion-dollar write-offs in the American nuclear business. As a result, the company's net worth turned out to be negative, threatening the manufacturer with a recall of shares from the Tokyo Stock Exchange and subsequent even more serious financial problems. To prevent delisting, Toshiba decided to sell the semiconductor business for $18 billion, controlled by Swiss meter manufacturer Landis + Gyr, and now the TV division.

For the fiscal year, which ended at the end of March 2017 calendar, Toshiba delivered 700 thousand TVs. Toshiba Visual Solutions revenue amounted to 43.7 billion yen ($384 million), losses - 6.14 billion yen ($54 million), Nikkei Asian Review reports.

A Toshiba spokesman told the publication that the sale of Toshiba Visual Solutions, which is scheduled to close by February 2018, does not involve a reduction in the staff of this unit (numbering about 700 people).^[13]

Japanese government structures and Bain Group buy out Toshiba's semiconductor business for $18 billion. The company remains 40% in the new company

On June 20, 2017, Toshiba named the preferred buyer of its semiconductor business consortium of Japanese government investors and Bain Group. The amount of the transaction ~ $18 billion.

As part of the consortium, the state investment fund Innovation Network Corporation of Japan (INCJ), the Development Bank of Japan, a bank from the Mitsubishi UFJ Financial Group, as well as private investment company Bain Capital and South Korean memory chip maker SK Hynix^[14].

But Toshiba still has a 40.2% stake in the new company, created on the basis of this division. Read more here.

Separate core businesses into individual companies

Toshiba Corporation consolidates advanced development of electronic and electrical products and systems in three strategic business areas: power, infrastructure, and storage. 

As of April 2017, Toshiba consists of the following major divisions:

• Energy & Infrastructure;
• Community Solutions (POS terminals, elevators and other equipment for use in buildings);
• Electronic Devices & Components (, hard drives semiconductors);
• Lifestyle Products & Services (computers, washing machines, refrigerators, cameras).

On April 24, 2017, Toshiba announced a restructuring involving the separation of the corporation's main business into new companies. The restructuring will begin in the summer.

In July 2017, Toshiba units responsible for the production of electronics, information and communication solutions, as well as social infrastructure projects (for example, the construction of railways and the installation of water treatment systems) will become new legal structures, 100% controlled by the Japanese conglomerate. In October, the same will happen to the corporation's energy business.

The manufacturer expects that the restructuring will make the separated areas more flexible, and they will have more freedom to realize new opportunities, and the duties of managers will become more understandable. Individual companies will be directly accountable to the market and customers, Toshiba said.

However, Nikkei observers cite another reason for the restructuring. The fact is that Toshiba is running out of validity of some construction licenses. A company that produces infrastructure and power generation equipment must receive new approvals every five years. Licenses are issued only to financially healthy companies, and Toshiba suffered multibillion-dollar losses in 2016 due to overspending in nuclear projects carried out by the American subsidiary Westinghouse Electric.

The separation of Toshiba's main business into new companies will affect about 19 thousand employees. The corporation promises to preserve the salaries of transferred workers, but warns that the amount of payments will change depending on the efficiency of new enterprises.

Some employees cited by Nikkei are alarmed by the upcoming restructuring, which they believe could leave some people out of work.

Toshiba management said the company has no future

On April 11, 2017, Toshiba management announced that it did not see a future for the company. Huge losses force the Japanese conglomerate to sell assets.

There are a number of important events and conditions that raise serious doubts about the company's ability to continue its operations on a continuous basis, Toshiba said in a statement on the occasion of the publication of the financial statements.

In October-December 2016, Toshiba received a net loss of 647.8 billion yen (about $5.6 billion), and in the last nine calendar months of the same year, cash losses reached 532.5 billion yen ($4.6 billion). For the 2016 fiscal year ended March 31, 2017 calendar, the corporation expects a loss of 1.01 trillion yen ($9.2 billion).

Toshiba twice rescheduled the publication of the financial report. A third delay could have led to the company's stock being pulled from the exchange in, Tokyo so the conglomerate provided quarterly data without approval from the company's auditor. PricewaterhouseCoopers Aarata After verification, the financial results are likely to be revised.

Toshiba President Satoshi Tsunakawa apologized for the problems facing the company and called the auditor's decision not to approve the financial report "truly regrettable." According to the head, Toshiba will make every effort to prevent the company from leaving the Tokyo Exchange.

Toshiba could not report financial results due to problems taking into account multibillion-dollar write-offs in a subsidiary Westinghouse Electric operating in the nuclear industry. At the power engineering specialists end of March 2017, Westinghouse Electric was declared bankrupt.

The huge losses of this "daughter" made Toshiba's equity negative. To improve its financial situation and prevent leaving the exchange, the company is forced to sell off assets. On March 30, 2017, Toshiba shareholders approved the sale of the semiconductor business. Then the Kyodo news agency announced the corporation's plans to sell the TV division.^[15]

Start of negotiations on the sale of TV business

On April 9, 2017, it became known about the upcoming sale of TV business to Toshiba.

According to Nikkei, the manufacturer of household appliances Vestel showed interest in the deal. Vestel was engaged in the licensed assembly of TVs under the Toshiba brand for the European market^[16].

Among the candidates may be Chinese companies from the Hisense Group (produces mobile and household appliances).

Experts estimate the amount of a possible transaction at "several hundred million dollars." Its completion is likely in March 2018 - the end of the company's fiscal year.

Westinghouse Electric bankruptcy

On March 29, 2017, the subsidiary Toshiba -, Westinghouse Electric filed for bankruptcy in. USA Read more. here

2016

Restarting the Computer Business

In December 2016, Toshiba announced the restart of the computer business. After a high-profile financial scandal, mass layoffs in the PC division, the curtailment of several product lines and the withdrawal from the foreign consumer laptop market, the Japanese company decided to start all over again.

In December 2016, Toshiba announced a new series of Dynabook V laptops, which, according to Kazuhiko Kashiwagi, one of the heads of Toshiba Client Solutions, marks a restart of the computer business, Nikkei reports.

As part of the reorganization, Toshiba began to independently produce laptops at a factory in Hangzhou (Zhejiang province, China). Previously, the company collaborated with contract electronics manufacturers, and it was thanks to them that Toshiba was able to manipulate financial statements, overestimating its own profits for several years.

The Hangzhou facility, which assembles Toshiba laptops for corporate and home users, has a high degree of production automation and an advanced worker motivation system.

In 2016, Toshiba reduced the headcount in the computer division by 40% to about 2,900. Through these measures, the company hopes to keep the PC business profitable and expects revenue of 1 billion yen ($8.52 million) and revenue of 226 billion yen ($1.9 billion) for the fiscal year, which will end in March 2017.

Nikkei notes that making any profit does not push the urgent need to curtail the PC business completely. However, most market participants believe that the company will hardly be able to make much money on computers, and in the event of losses, it will probably consider various options.

Toshiba is expected to sell 3m PCs in fiscal 2016, a third of which will focus on the consumer sector. By the end of 2016, the company's share in the global computer market is estimated at 3%.

Lawsuit from the world's largest pension fund

In June 2016, the world's largest pension fund sued Toshiba over accounting fraud that brought down the Japanese giant's quotes.

The Government Pension Investment Fund (GPIF), whose assets are estimated at $1.3 trillion (the largest indicator among pension funds), has filed a lawsuit against Toshiba, demanding to recover 900 million yen (about $8.6 million) from the corporation. Such are the losses incurred by third-party fund managers GPIF in the purchase of Toshiba shares in 2009 as part of their second public offering, fund spokesman Shinichirou Mori told Bloomberg.

We acquired the securities seven years ago. So much we estimated our losses from their possessions, - said Mori.

GPIF became Toshiba's first institutional investor to sue the corporation. Previously, about 50 individual investors, as well as other companies, including Seibu Railway and Livedoor, did this.

The first hearing in this case took place on June 21, 2016. Its results were not disclosed. Toshiba refrains from commenting on the request of Western and Japanese media.^[17]

In 2015, the Japanese authorities conducted an investigation, as a result of which it turned out that for several years the management of Toshiba deliberately distorted financial indicators, which led to an overestimation of profits by more than $2 billion. The company's shares have fallen in price by more than 40% since April 2015, when Toshiba admitted to financial fraud, by June 2016.

Satoshi Tsunakawa is the new CEO

On May 6, 2016, Toshiba announced the appointment of Satoshi Tsunakawa as the new head of the company. The change in leadership at the conglomerate comes in an attempt to emerge from the crisis that has come since the profit-gouging scandal.

The board of directors nominated Satoshi Tsunakawa as CEO and president of Toshiba instead of Masashi Muromachi, who headed the company in July 2015. The new chairman of the corporation will be Shigenori Shiga.

Canon bought Toshiba's medical business for $6 billion

On March 9, 2016, Toshiba Corporation announced the sale of the medical business to the Japanese manufacturer of photographic and printing equipment Canon. The value of the transaction was not officially disclosed, but authoritative media know that we are talking about more than $6 billion.

The division of Toshiba Medical Systems, which produces equipment for computer and magnetic resonance imaging, radiographic systems and other solutions for healthcare institutions, is subject to sale. Read more here.

2015

Resignation of company president Hisao Tanaka

In mid-July 2015, the media reported on the impending resignation of Toshiba President Hisao Tanaka in connection with a financial scandal in a Japanese corporation.

According to the Nikkei business publication, Mr. Tanaka has already warned his associates of his intention to resign in September 2015. His successor has not been named. Toshiba itself refrained from making informative comments, saying no decisions had been made as investigations were still ongoing into an incident involving discovered inaccuracies in the accounting records.

In the spring of 2015, Toshiba announced that a number of divisions of the company between 2011 and 2013 underestimated costs for a number of infrastructure projects, which led to inflated profit expectations. A special independent committee was established, which began to check the activities of Toshiba.

According to Nikkei, the commission found that Hisao Tanaka and previous Toshiba president Norio Sasaki, who by mid-2015 is vice chairman of the company's board of directors, gave their subordinates instructions to delay calculating losses in a number of infrastructure projects. If the involvement of top managers is proven, they cannot avoid layoffs. This can be announced after the end of the investigation, the source adds.

Sources familiar with Reuters the situation say that due to the revealed inaccuracies in financial data, Toshiba will be forced to write off about 300-400 billion yen ($2.4-3.2 billion) at a loss Japanese. The giant itself estimated cash losses at 50 billion yen ($405 million). In the 2014 fiscal year, which ended in March 2014, the corporation's net profit amounted to 51 billion yen. The publication of data for the 2015 financial year is delayed in connection with the investigation of accounting fraud.

According to the data MEDIA, after the publication of the report by an independent committee Japan , the Securities and Exchange Surveillance Commission (SESC) may begin its audit. She will transfer her own results to the financial regulator of Japan Financial Services Agency, which will already decide on sanctions against Toshiba.^[18]

Record penalty for report rigging

On December 7, 2015, it became known that Toshiba could be fined a record amount for the Japanese market for falsifying financial data.

According to The Wall Street Journal the newspaper, the Securities Japan and Exchange Surveillance Commission (SESC) made a recommendation to impose a fine of 7.3 billion yen ($59 million) on Toshiba. For Japan, the amount of this penalty will be the largest in history among all incidents related to accounting violations. True, this amount is meager compared to the monetary penalties of American companies involved in such financial scandals, the newspaper notes.

It is worth noting that the SESC statement on penalties against Toshiba is advisory in nature. For entry into force, it must be approved by the Financial Services Agency, which, however, often agrees with the decisions of the securities market regulator. Before the Toshiba scandal, the record for the Land of the Rising Sun was a 1.6 billion yen ($12.9 million) fine paid by industrial conglomerate IHI Corp. in 2008 for accounting violations.

The beginning of the financial scandal around Toshiba dates back to April 2015. In the eight months since then, the conglomerate's stock has fallen 40%. Several top managers involved in rigging reporting left the company, as a result of which Toshiba was credited with about $1.9 billion in extra profit for the period from 2008 to 2014.

To resolve the scandal, Toshiba reserved 8.4 billion yen (almost $68 million) in its accounts. This amount may not be enough, given that on December 7, 2015, 50 Toshiba shareholders filed a lawsuit against the corporation in Tokyo, demanding to recover from it about 302 million yen ($2.45 million) for distorting financial results and misleading investors.

The lawsuit was filed against the entire company, three former executives and two CFOs. The total number of Toshiba securities holders joining the class action could rise to 1,000, according to lawyers representing the prosecution. In June 2015, a similar lawsuit was filed in one of the American courts.^[19]

Cuts to 6,800 jobs

On December 21, 2015, Toshiba announced massive layoffs and a record loss that the company expects at the end of the financial year.

According to Toshiba, cited by The Associated Press, the company will cut 6,800 jobs in its personal computer, TV and consumer electronics division. Taking into account these layoffs, the headcount of the Japanese corporation will decrease by about 3%.^[20]

The liquidation of working positions will be carried out both in Japan, where it is planned to launch an early retirement program, and abroad. Toshiba did not specify the volume of cuts in a particular country.

The announced personnel reorganization will have a greater impact on the company's television business. The unit he employs will see 3,700 jobs cut, which equates to 80% of the total. Toshiba will also sell a TV company in Indonesia.

In addition, it is planned to sell a research complex in the suburbs of Tokyo and a controlling stake in the medical device business, which the corporation previously called one of the main drivers of growth in its revenues.

According to Nikkei, Toshiba will spend about 200 billion yen ($1.64 billion) on restructuring. Against the background of these expenses, the company expects a record loss of 550 billion yen ($4.5 billion) following the 12-month reporting period, which will end at the end of March 2016. A year earlier, net losses were measured at 38 billion yen ($312 million).

Also, the Japanese conglomerate predicts a rather big operating loss for the year - 340 billion yen ($2.78 billion). This suggests that large cash losses are associated not only with one-time expenses for business transformation, but also with the company's problems in its daily work in the market, notes The Wall Street Journal.^[21]

According to Bloomberg, the loss exceeding 500 billion yen that Toshiba expects is twice the total net profit of the corporation over the past 20 years.^[22]

At the close of the Tokyo Stock Exchange on December 21, 2015, which took place before the announcement of losses and job cuts at Toshiba, the company's shares fell in price by almost 10%. Since March 2015, securities have almost doubled in price.

Identification of grandiose frauds in overestimating financial indicators

Main article: Toshiba's financial performance

In April 2015, Toshiba discovered errors in financial statements and initiated an investigation, which was conducted by a group of independent auditors until August. They found that Toshiba's management deliberately distorted financial performance, which led to an overestimation of profit by 155 billion yen ($1.3 billion) over a seven-year period starting in 2008. This is three times the amount that was talked about in the company itself before the audit began. Profit before tax was overestimated by 225 billion yen ($1.9 billion), follows from the Toshiba report of September 7, 2015. Read more here.

2012: Acquisition of part of IBM's business

Toshiba's division is in talks with IBM to acquire part of its POS (Point of Sale Terminal) and cash registers business used in stores to settle with customers for purchases, an unnamed source told Reuters on April 17, 2012. It is known that it is directly related to the upcoming deal.

According to the Japanese newspaper Nikkei business daily (unofficial data), Toshiba intends to pay IBM about $870 million or 70 billion Japanese yen. Part of Toshiba's funds will be allocated from its own cash reserves, part will be borrowed.

Analysts explain such a high cost of the deal by IBM's extensive customer base with access to international markets. In particular, it includes the world's largest retail chain Wal-Mart Stores and the largest toy and children's goods chain Toys "R" Us, the main headquarters of both are located in the United States. Currently, IBM has the largest share of 22% in the POS terminal market, while Toshiba has only 7%.

If the deal goes through, Toshiba's half-owned subsidiary Toshiba Tec will become the world's largest manufacturer of POS terminals and related equipment. She also acts as a manufacturer of cash registers and software for managing retail sales and warehouse activities. Obviously, the acquisition will allow Toshiba Tec not only to get an impressive customer base and increase its presence in the market, but to strengthen technological leadership. The company already offers a number of promising cloud services for store owners, customers and manufacturers.

After disseminating information about the upcoming transaction, despite the general market contraction, the value of Toshiba Tec shares rose by 7.5% and reached $4.09. Presumably, the final decision will follow a meeting of company board members.

2009: Thompson is the first European president at Toshiba Europe

On July 1, 2009, Alan Thompson was appointed President of Toshiba Europe. Thompson replaced Noriaki Hashimoto in this position, who, after two years of presidency, returns to Tokyo. As president of Toshiba Europe, Thompson led the work of three divisions of the company:

• computer systems (laptops, mini-laptops, peripherals and accessories),
• consumer electronics (LCD TVs, DVD players and recorders) and
• storage systems (hard drives for entertainment systems, players, and laptops).

Thompson's appointment marked the beginning of a new stage in the development of the Japanese company, as for the first time a European will take over as president.

1968: Toshiba 500 Video Phone

1939: Merger of companies in Tokyo Shibaura Electric

In 1939, both companies, each of which was a leader in their field, agreed on a merger and formed a combined manufacturer of electrical equipment, called Tokyo Shibaura Denki (Tokyo Shibaura Electric). Soon this company became widely known under the name Toshiba.

1890: Hakunetsusha & Co Lamp Plant Foundation

In 1890, Ichisuke Fujioka founded Hakunetsusha & Co, the first Japanese incandescent electric lamp company.

1875: Tanaka Seizo-sho Founded

The history of Toshiba began in 1875 - the year of the founding of Tanaka Seizo-sho (Tanaka Engineering Works), which became the first Japanese manufacturer of telegraph equipment. The founder of the company, Hisashige Tanaka, was a well-known inventor in Japan. Among his most prominent inventions are mechanical dolls and watches that do not need to be started.

Notes