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Toshiba to Explore Alternatives to Sell its Westinghouse Related Assets

Press Releases   •   Nov 19, 2017 10:10 GMT

TOKYO - Toshiba Corporation (TOKYO:6502) (Toshiba) announced today that , as approved by its Board of Directors, it has decided to explore alternatives to sell to a third party its claims against Westinghouse Electric Company LLC (Westinghouse), including for reimbursement, along with the investment in Westinghouse,subject to obtaining certain required regulatory approvals. The successful completion of such efforts will allow Toshiba to significantly reduce the internal resources that it is required to allocate to Westinghouse’s rehabilitation proceedings, and to focus them on cultivating its new businesses.

Following Westinghouse’s filing of Chapter 11 in March 2017, Toshiba successfully negotiated with the owners of the Vogtle project, and entered into a settlement agreement in June 2017. The agreement sets the limit of Toshiba’s parent company guarantee obligation at US $3.68 billion, and specifies that payments are to be made in installments during the period from October 2017 to January 2021. In July, Toshiba also successfully entered into a settlement agreementwith the owners of the V.C. Summer project, which sets the limit of Toshiba’s parent company guarantee obligation at US $2.168 billion, and specifies that payments are to be made in installments during the period from October 2017 to September 2022.

However, both maximum guarantee amounts are specified in US dollars, and payments to both are to be made at the same time, exposing Toshiba to extremely high risks in respect of fluctuations in currency exchange rates associated with such huge amount of debt.

Further, since occurrence of the goodwill impairment in connection with Westinghouse’s acquisition of CB&I Stone & Webster Inc. (S&W), Toshiba has been required to devote material internal resources in monitoring and participating in Westinghouse’s Chapter 11 proceedings. Considering Toshiba’s other priorities that are unrelated to Westinghouse, Toshiba believes that it is the best interests of Toshiba and its stakeholders to resolve as many issues in connection with Westinghouse’s Chapter 11 proceedings as it can, as soon as practicable, in order to focus Toshiba's internal resources on its core business.

For these reasons, Toshiba has decided to find the necessary funding to offer to make early payment of the parent company guarantee obligation in the full amount, and to obtain the right to demand reimbursement from Westinghouse of the amount paid. Toshiba intends to sell its claims* to a third party, including such reimbursement against Westinghouse, and also Westinghouse-related interests that it holds.

*Note: as reported in Toshiba’s Quarterly Report of FY2017 Second Quarter as of November 9, 2017, Toshiba recorded losses regarding the parent company guarantee obligation, and made provision with respect to these assets. As a result, Toshiba recorded 1,394,157 million yen of net loss before income taxes from discontinued operation regarding the Westinghouse Group’s nuclear power systems business. Most of such loss requires an additional declaration under tax returns, the amount of which is approximately 1,400.0 billion yen, consisting of 640.0 billion yen of the shares relevant to Westinghouse, 100.0 billion yen of the loan receivables for Westinghouse, and 660.0 billion yen of the subrogation right against Westinghouse in connection with the parent company’s guarantee.

Given that Toshiba has been spending immense internal resources in connection with Westinghouse’s rehabilitation proceedings, Toshiba believes that it is highly reasonable to make early payment of the parent company guarantee obligations, to gain subrogation rights obtained by the full repayment, and to sell Westinghouse-related assets to a third party.In addition, it is also highly reasonable to now accelerate payment of the parent company guarantee obligations denominated in US dollar, as doing so will avoid uncertainty in respect of future currency exchange rates and currency fluctuation risk.

Furthermore, if the proposed sales of Toshiba’s Westinghouse-related assets**, is completed by the end of March 2018, Toshiba is expected to be able to reduce the tax impact recorded as a result of determining the value of the memory business, which would contribute a minimum of JPY240 billion to further remedying the negative consolidated balance sheet.

** Note: among these assets, since claims including reimbursement will not be subject to approval by respective regulatory authorities, if such sale of the claims is completed by the end of March 2018, at least 100.0 billion yen of the loan receivables for Westinghouse and 660.0 billion yen of the subrogation right against Westinghouse in connection with the parent company’s guarantee is likely to contribute to Toshiba’s consolidated shareholders equity for 240.0 billion yen (aggregate amount of the subrogation right and the loan multiplied by 30.9% of effective tax rate.)

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The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration, or qualification under the securities laws of any such jurisdiction.This announcement contains forward-looking statements concerning future plans, strategies and the performance of Toshiba Group. These forward-looking statements are not historical facts, rather they are based on management’s assumptions and beliefs in light of the economic, financial and other data currently available. Since Toshiba Group promotes business in various market environments in many countries and regions, its activities are subject to a number of risks and uncertainties that, without limitation, relate to economic conditions, worldwide mega-competition in the electronics business, customer demand, foreign currency exchange rates, tax rules, regulations and other factors. Toshiba therefore wishes to caution readers that actual results might differ materially from our expectations.

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

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Notice regarding Financing Transaction

Press Releases   •   Nov 19, 2017 10:09 GMT

TOKYO - Toshiba Corporation (TOKYO:6502) (Toshiba), as approved at its Board of Directors today, has decided to proceed with a financing transaction (the Financing) expected to close on December 5, 2017.

The proceeds from the Financing will be used to offer to make full payment of parent company guarantee related to nuclear power construction project of Westinghouse Electric Company LLC (Westinghouse). By obtaining funds necessary to offer to make early payment of the parent company guarantee and settling the obligations to creditors, Toshiba can obtain the right against Westinghouse to demand reimbursement of the amount paid by Toshiba. Toshiba intends to sell its claims, including reimbursement, against Westinghouse and interests held by it related to Westinghouse to a third party. If such sale is successfully made, Toshiba is expected to be able to significantly reduce its internal resources it had to allocate to the rehabilitation proceedings of Westinghouse and focus its internal resources on its new businesses after the sale of the Memory Business.

In addition to the above, Toshiba is expected to be able to avoid currency fluctuation risk related to the maximum amount of the parent company guarantee specified in US dollar by making full payment of the parent company guarantee.

Further, if the sale of the claims, including reimbursement, against Westinghouse and interests related to Westinghouse is completed by the end of March 2018, Toshiba is expected to be able to reduce the tax impact recorded as a result of the value of the memory business having been determined, and at least approximately JPY 240 billion will contribute to further enhancing Toshiba’s capital base.

If the Financing successfully completes and the claims against Westinghouse and interests related to Westinghouse are sold, it is expected that JPY 750 billion of negative consolidated balance sheet (i.e., liabilities in excess of assets) will be remedied as of the end of March 31, 2018 and thereby Toshiba’s pressing challenge will be resolved. After the closing of the transfer of the Memory Business, Toshiba will consider appropriate measures to return to shareholders while considering Toshiba group’s financial situation, business risks and other factors.

The Financing, full payment of the parent company guarantee, and the sale of the claims against Westinghouse and the interests related to Westinghouse will contribute to improve and strengthen Toshiba’s financial situation and enhance its cash balance. The detail of the impact on Toshiba’s financial results is under review.

The successful completion of the Financing will remedy a negative consolidated balance sheet and enable Toshiba to avoid the delisting of its shares, both of which have been pressing challenges of Toshiba. Subsequently, Toshiba group, as the new Toshiba, will focus on four business domains, Social Infrastructure as a core, along with Energy, Electronic Devices and Digital Solutions. Toshiba will pursue to strengthen its revenue base and achieve stable growth in each business domain and to recover its diminished financial base.

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The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration, or qualification under the securities laws of any such jurisdiction. This announcement contains forward-looking statements concerning future plans, strategies and the performance of Toshiba Group. These forward-looking statements are not historical facts, rather they are based on management’s assumptions and beliefs in light of the economic, financial and other data currently available. Since Toshiba Group promotes business in various market environments in many countries and regions, its activities are subject to a number of risks and uncertainties that, without limitation, relate to economic conditions, worldwide mega-competition in the electronics business, customer demand, foreign currency exchange rates, tax rules, regulations and other factors. Toshiba therefore wishes to caution readers that actual results might differ materially from our expectationsIn connection with the Financing, no securities will be or have been registered under the United States Securities Act of 1933, as amended, and may be offered or sold in the United States‎ absent registration or an applicable exemption from registration requirements.

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

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Giving CO2 an economic value: Carbon capture technology helps recycle waste into resources

Blog posts   •   Nov 16, 2017 07:00 GMT

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Toshiba Memory Corporation to Further Accelerate Equipment Investment in FY2017

Press Releases   •   Nov 09, 2017 04:30 GMT

Please refer to our Investor Relations website below.

http://www.toshiba.co.jp/about/ir/en/news/20171109_1.pdf

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

Read more »
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Business Results for FY2017 Q2

Press Releases   •   Nov 09, 2017 04:30 GMT

Please refer to our Investor Relations website below.

http://www.toshiba.co.jp/about/ir/en/pr/pr2017q2.htm

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

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Non-Destructive Inspection Gets the Inside Story

Blog posts   •   Nov 02, 2017 07:00 GMT

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Notice Regarding Revision of Toshiba Corporation's s Consolidated Business Results Forecast for FY2017

Press Releases   •   Oct 23, 2017 05:48 GMT

Please refer to our Investor Relations website below.

http://www.toshiba.co.jp/about/ir/en/news/20171023_1.pdf

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

Read more »
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Arm in Arm: Toshiba’s New Robot and Coexistence with People

Blog posts   •   Oct 19, 2017 07:00 GMT

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Toshiba Memory Corporation to Further Invest in Production Equipment for Fab 6 at Yokkaichi Operations

Press Releases   •   Oct 11, 2017 07:16 GMT

Please refer to our Investor Relations website below.

http://www.toshiba.co.jp/about/ir/en/news/20171011_1.pdf

About Toshiba

For over 140 years, Toshiba Corporation has contributed to a sustainable future by applying innovative technologies to value creation. Today, our business domains are centered on the essential infrastructure that supports modern life and society. Guided by the principles of The Basic Commitment of the Toshiba Group, “Committed to People, Committed to the Future”, Toshiba promotes global operations that contribute to realization of a world where generations to come can live better lives.

To find out more about Toshiba, visit www.toshiba.co.jp/worldwide/about/index.html

Read more »
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Out of the Lab: No More Disappearing Balls in Baseball Night Games

Blog posts   •   Oct 05, 2017 07:00 GMT

About Toshiba Corporation

Committed to People, Committed to the Future

Toshiba’s mission to lead in innovation is based on its passion for creating products that benefit people and society, and a firm belief in the power of technology to make the world a better and safer place. The company’s commitment to Corporate Social Responsibility (CSR) is also reflected in its establishment as one of the world's foremost “eco-companies,” led by a business model that includes a greening of process, products and technology in all its operations.

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