Toshiba to Raise 600 B. Yen in Fresh Capital

Tokyo, Nov. 19 (Jiji Press)--Toshiba Corp. <6502> said Sunday it will issue more than two billion new shares for third-party allotment on Dec. 5 to raise 600 billion yen in fresh capital, an effort to keep its shares listed. The capital increase is a precautionary step in case that the struggling Japanese electronics and machinery maker fails to sell its memory chip unit by the end of this fiscal year through March 2018. "The successful completion of the financing will remedy a negative consolidated balance sheet and enable Toshiba to avoid the delisting of its shares," the company said in a press release. Toshiba posted a negative net worth of 552.9 billion yen at the end of March 2017 due to losses at its U.S. nuclear operations, an amount expected to grow to 750 billion yen at the end of March next year. If a company listed on the Tokyo Stock Exchange posts a second straight year of negative net worth, its shares will be delisted under TSE rules. Toshiba has agreed to sell the chip unit, Toshiba Memory Corp., to a consortium of companies led by U.S. private-equity firm Bain Capital to improve its finances. But there are concerns that the sale may not be completed by the end of March 2018 due to lengthy antitrust reviews in Japan and abroad. The equity financing is expected to put heavy downward pressure on Toshiba's stock price, as the number of new shares represents more than 50 pct of the total number of the company's outstanding shares and the issue price, set at 262.80 yen apiece, is 17.5 pct lower than the average price over the past month. The new shares will be issued to dozens of funds and investors overseas, including activist investors such as Singapore's Effissimo Capital Management Pte. Ltd., the largest shareholder of Toshiba. Effissimo's stake is expected to rise to 11.3 pct from 9.9 pct at present. END