Toshiba creates subsidiaries 'to maximise value'
Toshiba Corp said today it will establish its four in-house companies as wholly-owned subsidiaries and aim to "to maximise the value of each business". As of 1 October, it will split off its Energy Systems & Solutions Company, and the Nuclear Energy Systems & Solutions Division, and transfer them to a newly established company.
The decision announced today follows the 'Strengthening Toshiba Group's Organisational Management', as disclosed in 'Measures to Rebuild Toshiba' announced on 14 March. On the same date, Toshiba also announced its intentions in respect of 'Eliminating Risk Related to the Overseas Power Business', "which has been realised" by the start of Chapter 11 proceedings that "eliminate" Westinghouse from its 2016 financial year consolidated earnings results, as was announced on 29 March.
From 1 July, the other three companies to be established as independent business entities are Infrastructure System & Solutions Company, Storage & Electronic Devices Solutions Company, and Industrial ICT Solutions Company.
The changes will allow the new companies "to clarify their responsibilities to the market and customers, which will ultimately support maximisation of their business value", Toshiba said. They will also "aim to refine governance and risk management structures so as to match their diverse business environments, and will directly secure the services of external auditors", it added.
Toshiba said the new company for its energy business will "obtain special construction business licenses, in order to maintain business continuity in respect of its ability to engage in businesses that requires such licenses. By this, it will realise a continuous and smooth business transaction". 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", it added.
On 11 April, Toshiba reported a loss of ¥532 billion ($4.8 billion) for the first nine months of its 2016 financial year (April to December), up from a ¥479.4 billion loss recorded in the same period of FY2015.
Westinghouse Electric Company, which Toshiba bought in 2006, filed for Chapter 11 bankruptcy on 29 March to protect it from creditors while it undergoes restructuring. Toshiba warned in December last year that it might have to write off "several billion" dollars because of Westinghouse's purchase in 2015 of US construction firm CB&I Stone & Webster (S&W).
Westinghouse is constructing eight AP1000 pressurized water reactors - four in the USA (two each at Vogtle and Summer) and four in China (two each at Sanmen and Haiyang) - with S&W as its consortium partner. Both Toshiba and Westinghouse have stressed that the filing affects nuclear power projects in the USA only.
Toshiba has said it plans to announce its final earnings report for FY2016 in mid-May.
Researched and written
by World Nuclear News
