Toshiba completes sale of Westinghouse claims, replenishes finances

TOKYO (Reuters) – Toshiba Corp (6502.T) said on Tuesday it has completed the sale of its claims against bankrupt U.S. nuclear unit Westinghouse Electric Co LLC, a move that allows the Japanese conglomerate to replenish its depleted capital base and remain listed.

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FILE PHOTO: A logo of Toshiba Corp is seen on a printed circuit board in this photo illustration taken in Tokyo July 31, 2012. REUTERS/Yuriko Nakao/File Photo

The $2.16 billion sale, to a group of hedge funds led by the Baupost Group, will also come with tax benefits and improves Toshiba’s balance sheet by about 410 billion yen ($3.7 billion).

Liabilities at Westinghouse plunged Toshiba into crisis last year, and the beleaguered Japanese firm put up its prized memory chip business – the world’s second biggest producer of NAND memory chips – for $18 billion.

Toshiba also plans to transfer its stake in Westinghouse to Canada’s Brookfield Business Partners (BBU_u.TO) for $1 by March 31. Both deals will help clear a path for Westinghouse to emerge from bankruptcy.

The sale of the claims and a new share issue worth 600 billion yen to overseas funds have helped Toshiba avoid falling into negative net worth for a second consecutive year, allowing it to remain a listed company.

The funds have also meant that it faces less pressure to complete the sale of the chip unit to a consortium led by U.S. private equity firm Bain Capital and some shareholders are pushing Toshiba to reconsider.

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Toshiba, however, is sticking with its efforts to complete the sale of the chip unit by the end of March, saying it needs to further bolster the capital base.

($1 = 110.9300 yen)