Toshiba Goes Private After 74 Years On Tokyo Stock Exchange

Toshiba Goes Private After 74 Years On Tokyo Stock Exchange

Toshiba was delisted on Wednesday, ending its 74-year history as a public firm on the Tokyo exchange, after a private consortium had bought almost 80% of its shares.

Toshiba shares

The conglomerate is taken private by a group of investors led by private equity firm Japan Industrial Partners (JIP), including financial services firm Orix, utility Chubu Electric Power, and chipmaker Rohm.

The JIP-led consortium now holds 78.65% of all its stake, following a $14 billion (¥2 trillion) buyout.

Toshiba, whose roots go back to 1875, evolved into a conglomerate in the 20th century, known for Japan’s postwar economic revival and technological innovation.

Four JIP executives will be on the board, as well as one each from Orix and Chubu Electric. A senior advisor from Toshiba’s primary lender, Sumitomo Mitsui Financial Group, will join the new management team.

Toshiba “will now take a major step toward a new future with a new shareholder,” the company said in a statement, adding that it would appreciate support from its stakeholders.

The Tokyo-based firm’s share trading ended Tuesday at $32, down 0.1% from the previous day.

“Toshiba’s difficulties ultimately were caused by a combination of bad strategic decisions and bad luck,” Damian Thong, head of Japan research at Macquarie Capital Securities, told Reuters.

Uncertain future

Although Toshiba’s strategy under its new owners is unclear, CEO Taro Shimada, who stays in his role following the buyout, is set to focus on high-margin digital services, Reuters reported.

Toshiba has started taking new moves, teaming up with Rohm to pour investments of $2.7 billion into manufacturing facilities to jointly produce power chips.

The Japanese government was said to be keeping a close watch, as Toshiba’s 106,000 employees and some of its operations are seen as critical to national security.

Financial performance

Toshiba posted a net loss of $362.8 million for the six months through September, dragged down by losses related to its chip affiliate Kioxia.

The figure is a reversal from a net profit of $700.6 million the Japanese conglomerate logged for the same period a year earlier. Sales fell 6.1% to $10.4 billion as its hard disk business slowed.

However, Toshiba kept its earnings forecast for the year ending March, projecting its operating profit to decline by 0.5% from the previous year to $765.4 million on sales of $22.3 billion, down 4.8%.

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