Toshiba: Stock market withdrawal causes problems

The Japanese corporation Toshiba wants to withdraw from the stock exchange. This wish is due to powerful shareholders who want to significantly increase the company’s valuation. However, the withdrawal from the stock exchange brings with it a number of problems. As an alternative, a split into several listed companies is now being discussed.

Financing causes problems

In order to be able to cope with the withdrawal from the stock exchange, Toshiba is dependent on investors who will enter the company or take it over. Interested is said to be a consortium around Japan Industrial Partners Inc., which is probably favored by Toshiba as a takeover investor. In addition, the investment fund Japan Investment Corp. seems to be interested. However, since there are no concrete plans, banks are reluctant to lend the necessary money. Conditional is probably the all-round restraint also by the recession. Not only in the euro zone, but also in Japan, a strong devaluation of the respective currencies can be observed as economic growth slows down.

Against this background, Toshiba will in all likelihood not be able to meet its original target of completing its delisting and investor buy-in by November 7 of the current year. Most recently, Toshiba itself indicated that the process would take several months. As an alternative to the takeover, a split into several listed companies is being discussed. Shareholders also expect this to increase value.

Valuation at 16.2 billion euros

The company’s market capitalization is currently around 16.2 billion euros or $15.8 billion. Potential investors are said to have valued the company at $22 billion in June 2022, according to the Reuters news agency. Withdrawal from the stock market in the event of a takeover by an investor could consequently earn existing shareholders a lot of money.

Economically, the company is in good shape. In the second quarter of the current year, it generated sales of just under five billion US dollars. The profit was around 174 million US dollars. The group includes numerous companies that are active in different sectors. Toshiba products are not only used in consumer electronics, but also in trains and wind turbines. Toshiba is also one of the last remaining hard disk manufacturers. NAND memory, on the other hand, is no longer manufactured; this division has been outsourced to the company Kioxia, in which Toshiba now holds only 40 percent.