Toshiba Corp may cut staff in its home appliances, TV and computer businesses and look for a partner for its nuclear operations in the wake of a $1.3bn accounting scandal, CEO Masashi Muromachi told a roundtable of reporters. "The latest accounting problems might have been driven by the fact that some of our businesses have lost earnings power. We must urgently take action in these businesses." Toshiba has launched a new management team, which has won approval from shareholders. He acknowledged that the restructuring may temporarily hurt the company's capital base, which is already weak compared with rivals such as Hitachi.
Toshiba plans to finance restructuring through bank loans if needed, Muromachi said. The company is finding it difficult to raise funds through bond and equity issuance after being placed on the Tokyo Stock Exchange's watch list. Under the circumstances, Toshiba's nuclear power business, which has been a focus of investor attention, may need a partner, he said.
"The environment for the nuclear business is tough in Japan, and we need to address various issues to meet revised US regulatory rules," he added. Toshiba paid $5.4bn for an 87% stake in US nuclear unit Westinghouse Electric majority stake in 2006 at the height of the nuclear industry boom. But nuclear energy has since been negatively impacted by the Fukushima disaster and the US oil shale boom. The value of assets and goodwill related to the Westinghouse stake is viewed by many analysts as being overstated. However, Toshiba has so far resisted pressure for a writedown.
