Sunday , October 24 2021

Toshiba sells assets and cuts 7,000 employees in an attempt to restore investor confidence



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Japanese conglomerate Toshiba has announced that the restructuring is underway to restore investor confidence. The company starts selling problematic assets, cutting jobs and bailing out stocks. The news raised the price of its shares by 13%.

Correcting errors

The company announced that it would sell its British nuclear subdivision, and the Chinese company ENN will buy your liquefied natural gas business in the US. This is part of the company's new strategy for the next five years, which includes cutting 7,000 jobs.

The company's plan also includes the redemption of 40% of its shares. She is trying to regain investor confidence after the accounting scandal of 2015 revealed a series of irregularities in the conglomerate.

"It was possible that the company would sell its inefficient businesses and cut jobs in ways that were expected at some point, but investors are more likely to believe," says Hiroshima Fukunaga, chief executive officer of Investrust.

"The announcement of the 40% redemption of the shares is also definitely good news," he adds. Toshiba had already announced it would start a buyback of 700 billion yen, but did not specify when. The company also said it reduced its annual profit forecast to 60 billion yen, while previous expectations were 70 billion yen,

Plans and sales

The Japanese group is trying to sell assets that have led to losses. The decision to sell NuGen will delay Britain's plans to build a new nuclear power plant. At present, state-run South Korea is negotiating with Toshiba to buy a stake in NuGen. The country's energy minister said on Thursday it would coordinate its actions with the British government and would follow suit.

Toshiba said it will sell its US liquefied natural gas production facility to ENN Ecological, part of China's ENN gas company. The company has been trying for years to sell this business after signing a 20-year contract to buy LNG.

The Japanese company believes that asset sales and job cuts, as well as other restructuring plans, will help boost its long-term profitability.

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