Thursday, June 14, 2018
Toshiba announced on Wednesday plans for a share buyback worth about 700 billion yen ($6.95 billion) "at the earliest possible time."
The move is largely in response to growing voices from activist members ahead of the company's annual shareholders meeting scheduled for later this month.
Toshiba raised 600 billion yen in December through issuance of new shares, mainly to foreign hedge funds, in a bid to avert negative net worth at the end of March 2018, which would have led to delisting.
Earlier this month, the Japanese conglomerate earned more than 1 trillion yen cash from the sale of its memory chip unit. As Toshiba's finances improved, foreign investors started demanding buybacks as reward for their contribution to the company's turnaround.
Toshiba expects to hold its annual shareholders meeting on June 27. Some investors have hinted that they will oppose reappointment of Chairman and CEO Nobuaki Kurumatani if their concerns are not addressed.
The buyback offer seems timed to fend off trouble at the meeting so that the company can quickly begin restructuring efforts.
Toshiba is thought to have arrived at the buyback figure after considering possible expenses, including litigation related to natural gas operations in the U.S. and a class action suit from investors, as well as planned spending for structural reforms.
Following the announcement, Toshiba shares rose to an 18-month high on Wednesday, closing at 337 yen, up 6.6% from yesterday.
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