Toshiba unveils USD 6.3 billion share buyback after completing massive chip deal

Toshiba Corp announced a planned share buyback of around 700 billion yen ($6.33 billion), following up on a pledge to share the windfall from an $18 billion sale of its memory chip business.

Published: 13th June 2018 09:45 AM  |   Last Updated: 13th June 2018 09:45 AM   |  A+A-

The logo of Toshiba is pictured on its flash memory factory, seen during a media tour in Yokkaichi, western Japan September 9, 2014. REUTERS

By Reuters

TOKYO: Toshiba Corp announced a planned share buyback of around 700 billion yen ($6.33 billion), following up on a pledge to share the windfall from an $18 billion sale of its memory chip business which closed earlier this month.

Shares of the company rose 7 percent on Wednesday after the news.

Toshiba had promised to reward shareholders after completing the sale of the chips unit to a consortium led by U.S. private equity firm Bain Capital.

The company had in recent years cancelled dividend payments and came close to a delisting following an accounting scandal and massive cost overruns at its U.S. nuclear business Westinghouse. It avoided the delisting with a $5.4 billion share issue to overseas investors late last year.

Analysts have said Toshiba's growth prospects could be limited without its semiconductor unit and the medical business, which it sold earlier, but the company said it was considering dividend payments and the possibility of further moves to bolster shareholder returns.

"Even after repurchasing 700 billion yen in our shares, and although we no longer hold a memory business or overseas nuclear business, we assume we can maintain a healthy capital ratio," it said in a statement.

Toshiba said it will carefully consider the timing and method of the repurchases but aimed to carry them out as soon as possible.

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