Toshiba to spinning off chip arm

Toshiba shareholders have approved a proposal to spin off the company’s mainstay memory chip business.

The plan was given the go-ahead by a two-thirds majority at an extraordinary shareholder meeting on Thursday.

Toshiba’s US nuclear subsidiary Westinghouse filed for Chapter 11 bankruptcy on Wednesday. The company says total losses for the current business year could reach 9 billion dollars.

Toshiba wants to spin off its chip unit to cover the deficit and rehabilitate operations.

At the shareholder’s meeting, management faced numerous questions about why the massive losses at Westinghouse weren’t noticed earlier.

Toshiba plans to decide on the successful bidder or bidders by June.

The president of Toshiba says the bankruptcy filing by its US subsidiary Westinghouse is the first step toward turning around the ailing Japanese conglomerate.

Satoshi Tsunakawa spoke to reporters on Wednesday after the US nuclear unit filed for Chapter 11 bankruptcy protection.

He said the filing is indispensable for reviving Westinghouse and is in line with Toshiba’s policy to shut down its risky nuclear operation abroad.

He noted that Toshiba might incur further losses from the bankruptcy. Toshiba’s total losses for the current business year are reported to exceed 1 trillion yen, or about 9 billion dollars.

Tsunakawa said he feels great responsibility and pledged all-out efforts to put Toshiba back on its feet.
He said the company will continue its efforts to raise funds by spinning off its mainstay flash memory chip operation and selling other assets.

He noted Toshiba plans to secure a steady profit flow from its social infrastructure business in order to beef up its financial base.

He said now Toshiba has almost completely withdrawn from the overseas nuclear business.

He pledged Toshiba will continue to decommission reactors in Japan, taking seriously its sense of social responsibility.

Toshiba’s US nuclear subsidiary Westinghouse has filed for Chapter 11 bankruptcy protection.

The Japanese manufacturing giant is cutting its losses on its US nuclear business as it tries to rebuild its finances.

It faces ballooning costs to meet safety standards at 4 reactors in the US.

The subsidiary received orders for the reactors in 2008.

Toshiba says it could post a net loss of over 9 billion dollars for the current fiscal year.

Just over 2 weeks ago, Toshiba executives announced they would remove Westinghouse from their consolidated financial statements.

They intend to withdraw from the US nuclear business entirely.

NHK

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