Revisions to Toshiba's Forecasts as it Contemplates a Buyout

Toshiba, the Japanese conglomerate with the world's fourth largest economy, revised down its annual earnings forecasts on Tuesday as it said it was still weighing a purchase proposal that would take it private following months of negotiations.

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A shareholder vote against the idea of splitting the company into two led the firm to suspend its plans to split in two in April last year and to weigh going private instead.

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Earlier this week, Toshiba confirmed that it had received a "proposal" from a consortium led by Japan Industrial Partners (JIP), but without offering any further details on the proposal.

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Masayoshi Hirata, chairman of the special committee and chief financial officer of the company, reiterated on Tuesday that a close look is being given to the proposal at the moment".

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In spite of this, he declined to give a timeline for evaluating the offer, which according to the Nikkei business daily is estimated to be worth around 2 trillion yen ($15 billion).

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There will be a total of about one trillion yen in loans offered by major banks including Sumitomo Mitsui Banking and Mizuho Bank and other companies including financial services company Orix, electronic parts maker Rohm and power utility Chubu Electric in total, according to the statement.

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Compared to the same period last year, Toshiba posted a net loss of 16.7 billion yen in the October-December period, compared with a net profit of 55.1 billion yen in the same period.

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As part of the reason for the decline in operating profit, it reported a sales decrease of 4.2 percent to 774.9 billion yen, a drop of 87.5 percent on 774.9 billion yen in revenue, partly due to weak sales in the segment "electronic devices and storage solutions".

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The firm revised its forecasts for its full-year operating profit for the period ending March 2023 from 95 billion yen and sales for the period ending March 2023 from 3.32 trillion yen -- both of which are smaller than one percent from the previous forecast in November -- due to the effect of "one-off factors".

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It was also announced Tuesday by the company that its chief executive officer, Goro Yanase, would be stepping down because of misconduct in regard to entertainment expenses.

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In the last few years, Toshiba, which used to be considered a symbol of Japan's economic strength and technological prowess, has been rocked by scandals, financial woes, and shock resignations made by high-level executives.

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After the first proposal was made about the possible restructuring of Toshiba, almost two years have elapsed since the process has been started.