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Toshiba parts with Westinghouse stake with a chance for capital boost

Japanese company completes share sale to Canadian investment fund

TOKYO -- Toshiba has finished selling its stake in the U.S. holding company of ill-fated former subsidiary Westinghouse Electric, a move that could push up shareholders' equity at the Japanese conglomerate by as much as 200 billion yen ($1.86 billion) for the just-ended fiscal year.

The sale to Canadian investment fund Brookfield was announced on Friday. Toshiba also owns the U.K. holding company for Westinghouse and plans to finish the sale of this stake soon. The sale price for the British and American holding companies totals $1.

Toshiba's losses from selling the U.S. holding company were already reflected in earnings for the year ended March 2017. But the losses can be tax-deductible only after the conclusion of the sale.

The Japanese conglomerate forecast in February that shareholders' equity would reach 460 billion yen at the end of March, for a shareholders' equity ratio of 11%. With its tax burden set to shrink, the company now can expect shareholders' equity to rise to as much as 660 billion yen, depending on the outcome of talks with tax authorities.

Westinghouse, which became a cause of financial problems for Toshiba, filed for Chapter 11 U.S. bankruptcy protection in March 2017.

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