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Toshiba in turmoil

Toshiba eyes 200bn yen in asset sales

TOKYO -- Toshiba plans to unload sizable assets to shore up its financial footing weakened in the wake of an accounting scandal.

     The embattled diversified company said Friday that it is considering selling securities and other assets worth around 200 billion yen ($1.79 billion) in the year through March 2017.

     With the sale of Toshiba Medical Systems to Canon moving forward, Toshiba's equity capital ratio is expected to rise to around 10% from the dangerously low level of just under 3% now. But that remains far below 30%, a level considered healthy.

     Assets to be sold "will be reviewed, with no untouchable areas," CEO Masashi Muromachi said. Toshiba has agreed to sell its home appliances business to China's Midea Group for a price estimated at tens of billions of yen, and the company also likely will put factories, land and cross-shareholdings on the chopping block.

     Including assets already sold such as shares in a major European elevator company, Toshiba's fire sale in the two years through March 2017 probably will exceed 1 trillion yen. If all goes smoothly, Toshiba may be sitting on equity capital worth around 800 billion yen at the end of that time, near the slightly more than 1 trillion yen it held prior to the accounting scandal.

     Asset sales also are expected to improve other performance indicators such as net debt-to-equity ratio, which should fall to a healthy level of around 1. Toshiba's management hopes better financial stability will help the company regain the trust of market players.

(Nikkei)

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