Toshiba Corp (6502.T), a Japanese industrial behemoth, is expected to announce plans on Friday to split into three publicly traded firms focused on infrastructure, devices, and memory chips, according to persons familiar with the situation.
They said the strategy, which came out of a strategic assessment following a severely catastrophic corporate governance incident, is targeted at increasing shareholder value and persuading activist shareholders to quit.
According to insiders who were not authorized to speak to the media and declined to be identified, the evaluation calls for its nuclear power and infrastructure-related sectors to be put under one firm, while its power chips and hard disc drive divisions to form the backbone of another.
Toshiba’s 40.6 percent share in unlisted memory chipmaker Kioxia will be owned by a third entity.
Toshiba announced this week that a three-way split is one of the options being considered. On Friday, it declined to make any additional comments ahead of a series of announcements that will include the strategic review, second-quarter profits, and the findings of a corporate governance report.
Since an accounting scandal in 2015, the 146-year-old corporation has lurched from crisis to crisis. It received a $5.4 billion cash injection from more than 30 offshore investors two years later, avoiding delisting but bringing in activist shareholders Elliott Management, Third Point, and Farallon.
Since then, tensions between Toshiba management and overseas shareholders have dominated headlines, with an explosive shareholder-commissioned investigation concluding in June that Toshiba colluded with Japan’s trade ministry to prevent investors from having a say at last year’s shareholder’s meeting.
Toshiba is projected to make an operational profit of 37.7 billion yen for the July-September quarter, up from 15.8 billion yen a year earlier, according to an average of six analyst projections published by Refinitiv. Toshiba is expected to recover from a downturn caused by the COVID-19 epidemic.
