Toshiba earnings forecast revised up

Toshiba earnings forecast revised up

Toshiba Corp appointed a former banker experienced in dealing with distressed companies as CEO, and forecast its first annual profit in four years, helped by a buoyant chip business that it has agreed to sell. Kurumatani takes over on April 1st.

He is to run the business alongside current president Satoshi Tsunakawa, who plans to stay in his post and become COO.

Kurumatani, who is now president of CVC Asia Pacific Japan, a unit of British private equity firm CVC Capital Partners, will take up the Toshiba posts on April 1, the Japanese electronics and machinery maker said. The company has been losing billions of dollars in the nuclear energy operations.

Toshiba, which had earlier expected a full-year loss, upgraded its bottom line estimate as it factored in a drop in tax expenses associated with the sale of the prized chip business to a consortium led by Bain Capital.

Toshiba agreed in late September to sell Toshiba Memory, the world's second-biggest producer of NAND chips, to a consortium led by Bain Capital LP for US$18 billion to cover billions of dollars in liabilities arising from the now bankrupt USA nuclear power unit.

Failure to get approval would be vastly beneficial to Toshiba because it could then keep or IPO the unit, or IPO a part of the unit and still retain control.

Japanese electronics maker Toshiba has revised upward its earnings forecast for fiscal 2017, ending in March.

The return to net profit, combined with an additional 600 billion yen gained from the issue of new shares to overseas funds, will help Toshiba avoid falling into negative net worth for a second consecutive year, allowing it to remain a listed company.

The Tokyo-based firm said it now expects a net profit of JP¥520 billion (RM19.2 billion) for the year to March, reversing a net loss of JP¥966 billion a year earlier.