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Toshiba To Shed Troubled Assets, Cut 7,000 Jobs As Part Of New Five-year Strategy

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Toshiba To Shed Troubled Assets, Cut 7,000 Jobs As Part Of New Five-year Strategy

Toshiba Corp is liquidating its British nuclear power unit and selling its U.S. liquefied natural gas (LNG) business, as the once-mighty industrial conglomerate seeks to unload troubled assets and regain investors’ confidence.

The plans are part of a new five-year business strategy Toshiba announced on Thursday, which also included 7,000 job cuts, or 5 percent of its workforce, over five years.

The company’s shares surged as much as 13.7 percent to near two-year highs after the announcement, helped also by a much anticipated move to repurchase up to 40 percent of its own shares starting Friday. They closed 12.7 percent higher.

Toshiba has been trying to win back the market’s trust after a 2015 accounting scandal uncovered widespread irregularities at the laptops-to-nuclear conglomerate for years.

The scandal forced it to recognize huge cost overruns at now-bankrupt U.S. nuclear unit Westinghouse, prompting it to sell its prized memory chip unit earlier this year to a consortium led by U.S. private equity firm Bain Capital and leaving it with few growth businesses.

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“There had been reports about a possibility of selling non-performing business and job cuts so such moves had been expected at some point. But investors are taking heart,” said Hiroyuki Fukunaga, chief executive of Investrust, a financial advice firm.

“The share buyback announcement worth up to 40 percent of outstanding shares is definitely positive, too.”

Toshiba had already promised a share buyback of 700 billion yen earlier this year, but the timing had been undecided. Its announcement on Thursday appeared to outweigh a weaker profit forecast – the company said it now expects a full-year operating profit of 60 billion yen rather than a previous estimate of 70 billion yen.

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STEMMING LOSSES

Toshiba has been trying to shed troubled assets that could have exposed the Japanese company to future losses.

The decision to liquidate NuGen, however, would be a blow to Britain’s plans to build a nuclear plant that was meant to provide 7 percent of the country’s electricity. Reuters was the first to report last month that Toshiba was considering liquidating NuGen.

South Korea’s state-run Korea Electric Power Corp (KEPCO) has been in talks with Toshiba to buy a stake in NuGen. South Korea’s energy ministry said on Thursday it will closely coordinate with the British government on the NuGen project, while monitoring the liquidation process with KEPCO.

On the LNG project, Toshiba did not identify the buyer, saying that it was a foreign entity and will be announced later in the day. It will be paying the buyer $800 million to assume its commitment to purchase 2.2 million tonnes per year of the fuel from Freeport LNG in Texas.

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The company has spent years trying to either sell the gas to power customers or offload the business after signing the 20-year contract to buy LNG from Freeport.

The Nikkei business daily reported on Thursday, without citing a source for the information, that the buyer is a unit of Chinese gas company ENN Group. An ENN Group spokesman said when contacted by Reuters that he was not aware of the deal.

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CBN, SEC Grant Approval In Principle To Access And Diamond Bank Amid Merger

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CBN SEC Grant Approval IN Principle To Access And Diamond Bank On Proposed Merger

The Central Bank of Nigeria and the Securities Exchange Commission have granted an approval in principle to Access Bank and Diamond Bank on their proposed merger.

An Access Bank Executive Director, Victor Etuokwu, says the banks were expecting the final approval to come after the banks’ shareholders meetings.

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Etuokwu said the banks have received two of three approvals needed for the process, and that the final approval would be completed in the next sixty days.

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Etuokwu said the new bank that would emerge after the merger would focus on retail and corporate banking.

Robert Giles in charge of retail at Diamond Bank says customers will be able to use Automated Teller Machines, ATMs, of either bank at no cost.

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Maritime Expert Urges FG To Develop Policies To Boost Ship Ownership In Nigeria

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Maritime Expert Urges FG To Develop Policies To Enable Ship Ownership In Nigeria

The federal government has been asked to develop policies that would help increase local ship ownership that would help in the training of Nigerian seafarers.  Currently, there are no locally-owned ships operating in international waters.

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The call was made in Abuja on Tuesday by Mfon Ekong Usoro, secretary-general of the Abuja M.O.U. On Port State Control for West and Central African Region.

She said the absence of locally-owned vessels trading at the international stage has reduced opportunities for hand-on experience for Nigerian seafarers.

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Usoro said this has reduced the abilities of Nigerian seafarers to compete against their contemporaries around the world in areas of international shipping.

She called on NIMASA to invest in a training ship like that of South Africa’s Samsa and create berths for sea training for Nigerian seafarers.

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China Central Bank Injects $83 Billion Into Economy

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China: Central Bank Injects $83 Billion Into Economy

China’s central bank has on Wednesday injected a record $83 billion into the country’s financial system in order to avert a cash crunch that could destabilise the country’s economy.

The country’s weakening economy has made policymakers to step up stimulus measures in protecting jobs,

But a raft of measures last year from big rail projects to tax cuts seem to have had little impact so far, with recent data suggesting activity is cooling more quickly than expected.

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A senior economist in Hong Kong, Trinh Nguyen said, it is very obvious the economy of China needs help and so many authorities agreed to that.

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Wednesday’s injection was aimed at ensuring there are ample funds in the financial system, which is facing strains as tax payments peak in mid-January, and as demand for cash picks up ahead of the Lunar New Year holidays starting in early February, People’s Bank of China (PBOC) said.

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The injection which is the bank’s largest net single-day injection came a day after China’s state planner, central bank and finance ministry all offered reassurances to investors, signaling more spending and other types of policy support.

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