Toshiba revised its restructuring plans by announcing that it would eventually split into two instead of three. With this change, the Japanese conglomerate hopes to calm the vehemence of its foreign shareholders, with whom it has had conflicting relations for a while.
Toshiba wants to split into two
Last November, Toshiba explained that it wanted to split into three units: the first focusing on infrastructure, the second on electronic devices and the third would be designed to manage the company’s stake in Kioxia, a Japanese company specializing in the production flash memory, as well as other assets.
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The firm’s new plan, which is expected to be fully completed in March 2024, is to spin off its unit. device “, which manufactures in particular semiconductors, a sector currently hit by a very significant shortage. The goal is to finalize the split by March 2024, which will be overseen by the Japanese government. ” Toshiba is a company that has important technologies, especially in the field of nuclear energy and semiconductors, which are related to national security and it is important that companies are maintained and developed said Hirokazu Matsuno, Japan’s Chief Cabinet Secretary.
According to Toshiba, this new way of doing things will reduce costs and facilitate strategic alliances. If the CEO of Toshiba, Satoshi Tsunakawa, ensures that this organization was not designed to “avoid confrontation with shareholders”, it would seem that the reality is quite different. the wall street journal explains that some shareholders have publicly expressed their displeasure with the plan announced in November, demanding stronger measures to increase the value of the long-struggling technology conglomerate. The protesting shareholders also said they wanted it to be easier to block any plan deemed inadequate.
It was even recommended to Toshiba by one of its shareholders to consider other solutions, such as the sale of the entire firm to a private investor.
Conflicting relations with foreign shareholders
Toshiba’s restructuring was decided after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw the company’s stock market value more than halve. precise Reuters. Since an accounting scandal in 2015, the firm has seen repeated upheaval, while a recent shareholder-commissioned investigation revealed that Toshiba colluded with Japan’s Ministry of Commerce to prevent foreign investors from having influence. at its 2020 general meeting.
” The central problem plaguing Toshiba is the lack of trust between management and its shareholders, which has resulted in four years of protracted conflict. The very need for a shareholder to raise such an obvious point, even after repeated governance failures, only exacerbates the situation. “, assures Farallon Capital Management LLC, American shareholder of Toshiba.
Toshiba is struggling
The company also announced it would put its elevator and lighting businesses up for sale, and said it was no longer considering Toshiba Tec Corp, which makes point-of-sale systems and copiers. , as one of its main activities.
The difficulties encountered by the Japanese conglomerate are not new. In 2020, he announced that he was leaving the laptop market after being overtaken by his competitors in this sector. It remains to be seen whether its restructuring will be accepted by shareholders, who must approve it with more than a majority of votes.