TOSHIBA (Dow Jones) - Toshiba on Wednesday appointed an outsider to become chief executive officer and chairman (chairman) of the board of directors after a series of accounting scandals, record losses and the almost embarrassing delisting of the Tokyo Stock Exchange, .
Toshiba said in a statement on Wednesday that Nobuaki Kurumatani, Japan's deputy director of CVC Capital Partners (CVC), a private equity and investment advisory firm, will serve as chief executive officer and president of the company. Satoshi Tsunakawa, Toshiba's current chief executive, will step down as chief operating officer as chief operating officer. The above appointment will come into force on April 1.
Toshiba's board of directors approved in March last year that Westinghouse filed for bankruptcy protection in accordance with Chapter 11 of the Bankruptcy Code and devalues 7125 billion yen (about 6.2 billion U.S. dollars) in its nuclear assets. This also led to Toshiba's liabilities out of assets, facing the risk of delisting by the Tokyo Stock Exchange. Affected by this, Toshiba decided to sell its most profitable chip business, to make up for the loopholes in the balance sheet.
Toshiba auction chip business lasted nearly six months until last September signed a definitive agreement. Toshiba shareholders' meeting in October last year approved the chip business "Toshiba Storage Corporation" to 2 trillion yen (about 18 billion US dollars), the transfer to the United States private equity firm led by Bain Capital consortium, but this does not Toshiba is able to complete the transaction by the end of the fiscal year ending March 31, 2018. Since this transaction may face at least six months of regulatory review, the transaction may not be approved by regulators until the end of March this year.
As the new CEO of Toshiba, Nobuaki Kurumatani faces a daunting task as he not only needs investors to re-establish confidence in the 143-year-old Toshiba, but also in the absence of major businesses such as chip and nuclear power business , Toshiba to find new growth path. "By restoring and strengthening the financial foundation, I will devote all my experience and energy to Toshiba's reconstruction," Nobuaki Kurumatani, 60, said in a statement.
Prior to joining CVC, Nobuaki Kurumatani was former vice president of Sumitomo Mitsui Banking Corporation, one of Toshiba's major creditors, who often had a significant impact on Toshiba's management decisions.
Toshiba also announced Wednesday that the company has included its chip business in the discontinued operations from the third fiscal quarter ending December 31, 2017, resulting in a loss of 182 billion yen in the third quarter. In addition, Toshiba also fiscal 2017 performance expectations adjusted accordingly. The company currently expects the net profit of the company to reach 520 billion yen this fiscal year, better than previously estimated net loss of 110 billion yen, driven by the sale of claims on nuclear power business and tax adjustments. Toshiba also lowered its full-year revenue forecast to 3.9 trillion yen from 4.97 trillion yen in the previous year. Toshiba shares rose 1.9% on the Tokyo Stock Exchange on Wednesday.
Nobuaki Kurumatani graduated from the University of Tokyo, having previously worked in the banking field. Nobuaki Kurumatani also served as Sharp's director since June last year. It is unprecedented for Toshiba to appoint an outsider as its chief executive, as the company's executives are usually from the inside and want to be the chief executive of Toshiba, which can take decades.
Toshiba's sale of chip business transactions are still not fixed. The source said that the Chinese antitrust regulators have not yet approved the transaction, and is unlikely to approve the deal by the March 31 deadline. If the transaction can not be completed by then, Toshiba will have the right to terminate the transaction. Toshiba already had sufficient cash to replenish the balance sheet after it raised 600 billion yen ($ 5.4 billion) by issuing new shares at the end of last year, and completed the deal last week to sell Westinghouse debt, leaving Tokyo Stock exchange delisted pressure.
The source said that if the transaction can not be completed by March 31, Toshiba may be renegotiated, asking for a higher offer, or consider the spin-off chip business for initial public offering. It is reported that Toshiba signed in September last year, the sale of the chip business agreement, the actual value of the business may have underestimated the billions of dollars. (Compile / Ming Xuan)