In difficulty, Toshiba is divided into three autonomous entities

As Toshiba faces financial difficulties, its management has announced plans to split the Japanese tech giant into three separate companies: Infrastructure Service Co, Device Co and Toshiba, in hopes of ensuring sustainable earnings growth and enhancing the value and confidence of shareholders.

According to Toshiba staff, the Infrastructure Service Co will consist of Toshiba’s activities in the areas of power systems, infrastructure systems, building solutions and digital solutions. The unit will include in particular IT solutions, electricity generation, transmission and distribution, renewable energy, energy management, system solutions for public infrastructure, railways and industry, and energy saving solutions for buildings.

The Device Co entity will understand Toshiba’s activities in the field of electronic devices and storage solutions. Its products will include power semiconductors, optical semiconductors, analog integrated circuits, high-capacity data center hard drives and semiconductor manufacturing equipment. As for Toshiba, it will have shares in Kioxia Holdings Corporation (KHC) and Toshiba Tec Corporation.

For the year 21, the management of the Japanese giant expects the entity Infrastructure Service Co to generate net sales of 15.3 billion euros, for an annual growth rate of 3.3%. Device Co is expected to generate net sales of 6.7 billion euros, a performance that will remain stable in the coming years.

A split approved unanimously

The spin-off of the Japanese giant was unanimously approved by Toshiba’s board of directors. In a letter to shareholders, Toshiba staff specify that the separation plan “is just the beginning of a process that envisions a significant transformation of each independent company, better positioning them for sustainable and profitable growth while ensuring short-term returns. term for shareholders “. “To improve our competitive positioning, each company now needs greater flexibility to respond to its own market opportunities and challenges,” said Satoshi Tsunakawa, Toshiba President and Acting CEO.

“We are convinced that corporate segregation is attractive and compelling: it will unlock immense value by eliminating complexity, it allows companies to have a much more focused management, facilitating agile decision-making, and segregation naturally improves shareholder options. “, the last one also slipped. “Our board of directors and management team firmly believe that this strategic reorganization is the right step for the sustainable and profitable growth of each company, and the best way to create additional value for our stakeholders. “

The spin-off is expected to close in the second half of fiscal year 23, subject to necessary procedures, including shareholder approval. The move comes after months of turmoil within the company, including the removal of its chairman Osamu Nagayama by shareholders in June. Another director who was on Toshiba’s audit committee, Nobuyuki Kobayashi, was also ousted in a shareholder vote during the company’s annual general meeting.

It was the first general meeting organized by the Japanese giant since an independent investigation, voted on by shareholders, revealed that the company had reached an agreement with Japanese officials to prevent certain shareholders from exercising their voting rights at the annual general meeting of the year. last. The investigation, carried out by three lawyers, indicated that Toshiba had “devised a plan” with senior officials of the Japanese administration to prevent Effissimo Capital Management, which owns 9.9% of Toshiba’s shares, from exercising certain proposals before shareholders at Toshiba’s annual general meetings. .

Source: .com

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