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Toshiba to raise $5 bn in capital after losses

Toshiba to raise $5 bn in capital after losses
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First Published: Fri, May 08 2009. 01 16 PM IST
Updated: Fri, May 08 2009. 01 16 PM IST
Tokyo: Japan’s Toshiba Corp said it would raise up to $5 billion to shore up its capital after reporting a second straight quarterly operating loss, battered by a slump in the chip sector.
Chipmakers have been hit by sharp declines in demand and prices, prompting some to seek bankruptcy protection and others to look for partners. Almost all are losing money.
The company, the world’s No. 2 maker of NAND-type flash memory chips after Samsung Electronics Co, said it would raise as much as ¥493 billion ($5 billion) in capital, including new shares worth up to ¥313.1 billion.
It would raise the rest through an issue of subordinated bonds.
Toshiba’s operating loss totalled ¥74 billion in January-March, compared with a ¥115.7 billion profit a year earlier.
The company, whose products also include PCs, TVs and refrigerators, expects a 100 billion yen operating profit for the year to the end of next March, as it pushes ahead with a $3 billion cost-cutting plan.
Eighteen analysts polled by Thomson Reuters on average forecast a loss of ¥63.3 billion.
Toshiba is shifting focus to its relatively stable power business and other promising areas like lithium ion batteries, while shrinking investments in its chip business.
The company has said it hopes to lead an industry reorganisation in Japan to revive its system and discrete chip businesses. But it is facing hurdles here as domestic rivals NEC Electronics and Fujitsu Ltd have chosen other partners.
NEC Electronics is discussing a merger with Renesas Technology, while Fujitsu has decided to outsource its output to TSMC and said it may work together on the development of next-generation chips with the Taiwanese contract chipmaker.
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First Published: Fri, May 08 2009. 01 16 PM IST