Toshiba confirms shake-up as it sets out plans to split four business units into wholly-owned subsidiaries

 
Rebecca Smith
Toshiba president Satoshi Tsunakawa has said he is likely to use the spin-offs to help the firm renew its licence as a special construction business
Toshiba president Satoshi Tsunakawa has said he is likely to use the spin-offs to help the firm renew its licence as a special construction business (Source: Getty)

Toshiba has set out plans to split off its four in-house companies into wholly-owned subsidiaries as the firm looks to reorganise its structure.

The spin-offs, encompassing Toshiba's four pillars in its current setup, will occur from July.

Toshiba said the splits will "further enhance collaboration between the split-off companies, and, at the same time, aim to maximise the value of each business".

Read more: This chart shows how far Toshiba has fallen this year

The firm needs to section off the four units - electronic devices, social infrastructure, information and communication technology, and energy - so it can fulfil requirements to get its licence renewed for big construction projects, which have rules on how much capital or shareholder equity a company needs.

Toshiba said it will "establish an optimised structure for ensuring business continuity in respect of maintaining special construction business licences required to do business in Japan", and following the splits, will then focus on bolstering its governance system.

From 1 July, Toshiba's infrastructure systems, storage and devices, and industrial information and communication technology units will stand as three of the four distinct business units. Then from 1 October, the firm will transfer its energy systems and nuclear energy systems, both currently in-house, into a newly established independent entity.

Earlier this month, Toshiba finally filed its quarterly earnings, without the sign-off of its auditors, warning the future of the company was at risk.

Toshiba had twice failed to file its results for the three months to December as beancounters trawled through books of Westinghouse Electric, its US nuclear subsidiary.

Westinghouse is fighting for its existence after suffering massive cost overruns.

The company is also in the midst of looking for a buyer for its memory chip division.

Read more: Toshiba's stock jumps on reports of 2 trillion yen bids for its chip unit

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