Toshiba to shed troubled assets, cut jobs; shares jump nearly 12 per cent

Tokyo: Toshiba Corp said it is liquidating its British nuclear power unit and selling its US liquefied natural gas business, in an effort to shed troubled assets that could have exposed the Japanese company to future losses.

The plans are part of a new five-year business strategy Toshiba announced on Thursday, which also included more than 2,000 job cuts.

Toshiba shares surged as much as 11.8 per cent to near two-year highs after the announcement.

The decisions come as the company struggles to find new growth pillars after the sale of its prized memory chip unit earlier this year left it with low-margin businesses.

Toshiba sold the world’s No 2 memory chip business to a consortium led by US private equity firm Bain Capital to recover from years of financial trouble brought about by accounting scandals and cost-overruns at its now-bankrupt US nuclear unit Westinghouse.

The decision to liquidate the nuclear power unit, NuGen, would be a blow to Britain’s plans to build a nuclear plant that was meant to provide 7 percent of the country’s electricity.

Toshiba said it will announce the buyer of the LNG project when it signs a contract for the deal.

The Nikkei business reported earlier that Chinese gas firm ENN Ecological Holdings Co was chosen as the buyer of the LNG project.

The deal calls for ENN to take over Toshiba’s 20-year use-or-pay commitment at Freeport LNG export terminal in Texas, the Nikkei said.

When contacted by Reuters, an ENN Ecological investor relations department spokesman said it was not aware of the deal at this time.

Toshiba cut its annual operating profit forecast to 60 billion yen from the previous estimate of 70 billion yen.

It also said it would repurchase its own shares worth up to 700 billion yen, starting Friday.