TOKYO -- Toshiba is seeking buyers for shares in Toshiba Tec, a subsidiary listed on the first section of the Tokyo Stock Exchange, as part of an effort to quickly rebuild the conglomerate's financial position.
Toshiba Tec, the largest maker of cash register systems, stands in good financial shape, but its business has little connection with the rest of the group. As Toshiba rebuilds by focusing on areas such as infrastructure, non-nuclear energy and communications technology, the Japanese company plans to shed peripheral operations.
Toshiba aims for a swift decision regarding Toshiba Tec, having selected an advisory firm to assist in searching for buyers and offer procedural support. The conglomerate owns a 50.02% stake in Toshiba Tec, and it is estimated that Toshiba would raise roughly 100 billion yen should it decide to sell all shares. The size of the stake to be sold will be determined later. Taiwan's Hon Hai Precision Industry, better known as Foxconn, and investment funds are thought to be possible buyers.
Toshiba Tec holds a 50% share of the Japanese market for point-of-sale registers. Sales for the fiscal year ending March 31 are expected to reach 490 billion yen ($4.27 billion), with net profit seen at 5 billion yen. The company benefits from steady growth in replacement demand.
But Toshiba is struggling with the loss of around 700 billion yen incurred from its U.S. nuclear business. As of March 31, the company likely will have a negative net worth of 150 billion yen. Toshiba's main plan to raise cash involves spinning off its memory chip business and selling a majority stake, but other assets also will be subject to quick sales.