TOKYO – Toshiba today announced a return to an annual net profit and stressed that it will consider “credible” buyout offers, after a proposal from a private equity fund stirred turmoil within the storied Japanese firm.
The conglomerate – once a shining symbol of Japan’s advanced technology and economic power – has been rocked by turbulence, facing scandals and losses before staging a recovery.
It rejoined the prestigious first section of the Tokyo Stock Exchange in January after a sweeping restructuring, and today logged a net profit of ¥114 billion (RM4.3 billion) for 2020-21, beating its target.
“In Japan, though the pandemic has suppressed consumer spending, capital investment has been improving and exports have increased,” said the firm.
In 2019-20, it reported a net loss of ¥114.6 billion, still an improvement from the painful lows seen in recent years.
Today, Toshiba announced plans to create a “strategic review committee”, independent from management, to strengthen governance and communicate board decisions – including discussions on buyout proposals – to shareholders.
Nobuaki Kurumatani stepped down as CEO last month in a shock move as board members raised questions about the buyout offer from private equity fund CVC Capital Partners, reportedly in excess of US$20 billion (RM82.5 billion).
Kurumatani previously headed Japanese operations at CVC – although Toshiba said claims of a conflict of interest are not related to his departure.
Following his resignation, Toshiba on April 20 said it is “not possible” to evaluate CVC’s initial proposal because it lacks detail.
Toshiba today reiterated a pledge to evaluate solid buyout offers, saying “the board will seriously consider and evaluate any credible offers, objectively viewed, a bona fide and concrete offer of acquisition”.
“We believe the process and content of such a proposal must satisfy our many stakeholders, including shareholders.”
The company has worked to right the ship after a major accounting scandal in 2015 and the 2017 bankruptcy of its United States nuclear subsidiary Westinghouse Electric.
Its board now comprises mostly external directors, but the group faces pressure from activist shareholders who want to see faster growth and a clearer long-term strategy.
New CEO Satoshi Tsunakawa struck a conciliatory tone today as the firm raised its total dividend and announced a special shareholder return.
“My most important mission as CEO is to put our utmost efforts to rebuild trust with all stakeholders,” he told reporters.
Toshiba last month said CVC informed the company that it will “step aside to await our guidance as to whether a privatisation of Toshiba would suit management and the board of directors’ strategic objectives”.
Delisting Toshiba could produce faster decision-making by its management, and may also allow the group to concentrate resources on renewable energies and other core businesses. – AFP, May 14, 2021
