Sunday 18th April 2021

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  • Toshiba shares fall on new share sale plan

    toshiba innovationToshiba shares fell nearly 5% on Monday after the company announced a plan to help it retain its listing on the Tokyo Stock Exchange (TSE).

    On Sunday, Toshiba said it would raise $5.4bn (£4.1bn) from new shares to plug a hole in its balance sheet left by its bankrupt US nuclear unit.

    The TSE’s rules require the delisting of any company with a negative net worth for two consecutive years.

    Toshiba needs a positive net worth before the delisting deadline in March.

    The share sale is a short-term fix aimed at retaining the listing while a much bigger deal goes through.

    Toshiba agreed in September to sell its chip unit to a group led by Bain Capital for $18bn.

    The sale would easily cover Toshiba’s shortfall, but lengthy regulatory reviews mean the deal might not close before the deadline.

    Toshiba needs to raise at least $6.7bn by March to avoid being delisted.

    The share sale itself falls short of that number, but the company said it will also book losses that will allow tax write-offs, taking the total number to $7.5bn.

    The share sale amounts to roughly half the company’s current market value.

    The new shares will be allotted to 60 overseas investment funds, with each share priced at a 10% discount from Friday’s closing price.

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