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Toshiba has confirmed a reorganisation of its business structure, laying out plans to split off its four in-house companies into wholly-owned subsidiaries that will include its nuclear energy unit being combined with its energy business.
Owing to the deterioration in Toshiba’s finances, the company needs to split out the four business units so it can fulfil requirements to get its license renewed for big construction projects, which have rules on how much capital or shareholder equity a company needs.
Toshiba president Satoshi Tsunakawa has previously said he is likely to use the spin-offs to help the company renew its license as a special construction business.
Effective from July 1, Toshiba’s Infrastructure Systems, Storage & Devices, and Industrial Information and Communication Technology units will stand as three of the four planned independent business entities.
From October 1, the company will transfer its Energy Systems and Nuclear Energy Systems – both of which are currently in-house companies – into a newly established independent entity.
Following the company splits, Toshiba said it “will further enhance collaboration between the split-off companies, and, at the same time, aim to maximise the value of each business.” Additionally, the reshuffle “will establish an optimised structure for ensuring business continuity in respect of maintaining special construction business licences required to do business in Japan.”
The company also pledged that following the splits it would “further concentrate” on maximising the group’s overall value and strengthening corporate governance.
Toshiba is still in the throes of finding a buyer for its memory chip division.
Shares in the company were up 1.1 per cent in early afternoon trading in Tokyo.