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Toshiba runs into hurdle as it tries to sell Texas LNG asset

US agency's scrutiny keeps deal with Chinese company from closing in March

Toshiba had wanted to contain losses associated with a Texas LNG company to the recently ended fiscal year.   © Reuters

TOKYO -- Toshiba's planned sale of its liquefied natural gas business to a Chinese company has been delayed until sometime this month or later, the Japanese conglomerate said on Monday, revealing a complication as the group restructures its sprawling business operations.

Under the original plan, the transaction was expected to be completed by the end of March. Toshiba now says it is facing a delay in securing approval from the Committee on Foreign Investment in the United States, a federal agency that examines the national security implications of foreign investments in the U.S.

Toshiba had hoped the losses on its LNG investment would not be carried over from the business year that ended March. Now the losses, believed to total 93 billion yen ($838 million), are likely to be reported in the current business year.

Toshiba entered the LNG market in the U.S. state of Texas in 2013 by acquiring a stake in a business that turns U.S. shale gas into LNG.

The company Toshiba is trying to sell the business to is ENN Ecological Holdings, a private gas producer listed in Hong Kong. In China, ENN Ecological Holdings supplies gas in cities, operates pipelines and engages in gas trading. It is apparently trying to diversify its supply sources by purchasing the Toshiba operations.

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