The company's plan is to buy 40% of its own shares at the opening of the stock exchange on Friday.
© Yuya Shino
Japanese conglomerate Toshiba has announced restructuring is ongoing to restore investor confidence. The company starts selling disturbing assets, reduces business and redeems stocks. News has increased stock price by 13%.
The company announced it would sell its British nuclear division, and the Chinese company ENN will buy its American business with liquefied natural gas. This is part of the company's new business strategy for the next five years, including a reduction of 7,000 jobs.
The business plan also includes the purchase of 40% of its shares. she trying to restore investor confidence after the accounting scandals for 2015 revealed numerous irregularities in the conglomerate.
"The company could sell its inefficient companies and reduce the number of jobs so that they are expected at some point but are more likely to be the investors' creditor," says Hiroyuki Fukunag, CEO of Investrust.
"Notice of buying 40 percent of shares is also a good news," he adds. Toshiba has already announced that it would start buying 700 billion yen, but did not specify when. The company also said it had reduced its annual profit forecast for 60 billion yen, while previous expectations amounted to 70 billion yen,
Plans and sales
The Japanese group is trying to sell property that has led to losses. The NuGena sale decision will postpone British plans to build a new nuclear power plant. The current state-owned company of South Korea, Korea Electric Power, is negotiating with Toshiba to buy shares in NuGen. Energy Minister of the country said on Thursday it will coordinate its proceedings with British government and follow that process.
Toshiba has announced it will sell the leaked natural gas production plant in the United States ENN Ecological, a part of ENN's Chinese gas company. For years, the company has been trying to sell this company after signing a 20-year contract to buy LNG.
The Japanese company believes that asset sales and job reductions, as well as other restructuring plans, will boost long-term profitability.
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