Toshiba reorganization plan introduced the Japanese government to join hands to increase the difficulty

Tencent Technology News February 9 news, according to foreign reports, Toshiba is in urgent need of a restructuring plan, but because of the ambiguous role played by the Japanese government in the Toshiba restructuring, this will increase the difficulty of Toshiba to develop a restructuring plan.
The troubled Sharp made an unexpected decision last week, because the company said it prefers the acquisition offer from Taiwan's Hon Hai Precision, instead of accepting the Japanese government's corporate revitalization fund, the Japan Industrial Innovation Agency (Innovation Network Corp. of Japan) ) the restructuring plan.
Since last year, Hon Hai Precision has been competing with Japanese industrial innovation institutions for control of Sharp. As Sharp's consumer electronics business sector continues to decline, and the LCD panel manufacturing sector is facing fierce market competition, the Japanese company that has been established for centuries has been in a loss in recent years.
According to sources, the Japanese industrial innovation agency is also negotiating with Toshiba executives. If Sharp chooses not to accept the Japanese industrial innovation agency's plan, it will also affect Toshiba's restructuring.
The exposure of the accounting scandal last year and the continued deterioration of the company's core business have caused Toshiba to urgently need assistance. Toshiba’s share price fell to 167 yen on Monday, setting a new low since November 1979. Toshiba predicted last week that the company's net loss for the current fiscal year will reach 710 billion yen (about 6.1 billion US dollars).
On Friday, Standard & Poor's downgraded Toshiba's corporate bond rating by three levels to junk status. Standard & Poor's said Toshiba's short-term borrowing "has a staggering growth rate," and "the company needs the support of the main creditor bank to maintain liquidity."
Toshiba president Masashi Muromachi said last week that he hopes to draft an outline of the company's restructuring plan at the end of this month. The company has said it wants to sell some or all of its medical device, semiconductor and white goods businesses.
According to sources, the Ministry of Economy, Trade and Industry currently believes that the decomposition of Toshiba can create some more powerful companies, which will be a good opportunity to consolidate Japanese industry. It is reported that the Ministry of Economy, Trade and Industry and Japan's industrial innovation agencies have hoped to merge Toshiba and Sharp's white goods business.
However, Hon Hai Precision's plan to acquire Sharp will make the Japanese government's plan ruin, because Hon Hai Precision hopes to keep Sharp intact. Toshiba’s Muromachi Masahiro also said that he would consider selling the company’s white goods business to a non-Japanese company.
Within the Japanese government, there is also a great controversy over whether the government should intervene in Toshiba’s restructuring. Toshiba's situation is extremely special because it has a considerable nuclear power business in Japan and overseas through its Westinghouse Electric, so Toshiba's fate will also be related to Japan's national security issues.
Standard & Poor's pointed out that if Toshiba can sell a medical system that manufactures X-ray equipment and other scanning equipment at a good price, the company's liquidity problems are expected to be resolved. Toshiba's medical systems division is currently one of the few profitable assets.
Toshiba said it will sell the controlling stake in the division. According to sources, the sale of the medical system department's shareholding award gave Toshiba more than $3 billion in cash.
"Yomiuri Shimbun" reported on January 30 that the number of buyers of Toshiba Medical Systems reached 10, including Sony, Mitsui and Hitachi. Canon’s chief financial officer said last month that the company is interested in Toshiba’s medical systems division. As of now, the above companies have not commented on this report.
Canon, Fuji and Konica Minolta have been the giants of the Japanese camera industry, and now they are involved in the medical image business. The three companies involved in the acquisition of Toshiba's medical system division will enable Toshiba's technology to remain in Japan. A Japanese government official said, "If the buyer is a pure foreign investment fund, they may sell the asset to overseas companies in the future, which does not make any sense to Toshiba and the entire Japanese industry."
Disappointing performance Toshiba released a financial report last Thursday, saying that the company's net loss will reach a record 710 billion yen (about 6 billion US dollars) in the fiscal year ending March this year. Toshiba had previously expected a net loss of 550 billion yen this fiscal year. According to Bloomberg's survey data, market analysts had previously expected that Toshiba's net loss for the fiscal year would be 505.5 billion yen.
In the third fiscal quarter ended Dec. 31, Toshiba's net loss was 516.7 billion yen, less than the net profit of 54.6 billion yen in the same period last year. Bloomberg statistics show that market analysts had expected Toshiba's third-quarter net loss to be 111.5 billion yen. Due to the previous seven consecutive years of fraud, the cumulative net increase of 1.2 billion US dollars in net profit, resulting in Toshiba forced to reduce the book value and layoffs. After the stock price plummeted 51% in 2015, Toshiba’s share price has fallen more than 20% this year.
In addition to the sale of the controlling stake in the medical systems division, Toshiba is currently disposing of some of its assets. After selling the stake in KONE Elevator earlier, Toshiba is currently considering selling real estate and investment. Toshiba’s other programs include accounting training, corporate governance assessments, management seminars, and assessment systems for presidents and CEOs. In addition, Toshiba is considering merging the PC business with Fujitsu's PC business and Sony's Vaio.
Toshiba said in December last year that the company is considering a credit line of 300 billion yen from the bank. Together with the 400 billion yen credit line that Toshiba received in September last year, the company's loan facility will exceed 1 trillion yen. Muromachi said that Toshiba will no longer openly finance in the next two years.