Toshiba to sell stake in Carrier, split into two entities

Toshiba plans to sell its joint venture stake in Toshiba Carrier Corp. to US-based Carrier Group for about $877 million as part of efforts for placating unhappy shareholders.

The Japanese technology giant is also selling Toshiba Elevator and Building Systems Corp. and Toshiba Lighting & Technology Corp. while splitting into two companies, one focused on devices and the other on infrastructure.

The proposal is still subject to shareholder and regulatory approval.

An earlier proposal for a three-way split was scrapped for its unpopularity with some shareholders.

While it was once among Japan’s most revered brands, Toshiba has been struggling since the Fukushima nuclear disaster in March 2011.

Toshiba’s reputation was also tarnished by an accounting scandal, with its CEO resigning in 2015 to take responsibility for doctored accounting books that set unrealistic earnings targets.

he |Japanese tech gian said it will provide $2.6 billion of excess capital as shareholder returns for two years.

Toshiba CEO Satoshi Tsunakawa acknowledged that the plan came about after further engagement with key stakeholders, which includes foreign funds that objected to the earlier restructuring plan.

The plan says that Toshiba Infrastructure Service Co. will include its energy businesses, while Toshiba Device Co. will encompass computer chips and storage.

Both will be stand-alone firms with “distinct visions.”

Atul Goyal, an equity analyst at Jefferies, said the moves are among encouraging signs that Toshiba is showing, noting that selling non-core businesses highlights commitment to shareholder returns.

The restructuring is set for completion by the second half of fiscal 2023.

Toshiba is expecting to report a $1.3 billion profit for the fiscal year through March.