Toshiba is set to be dropped from the top tier of the Tokyo Stock Exchange as it financial woes continue. A spokesperson for Japan’s Nikkei 225 index said that watch and printer manufacturer Seiko Epson will replace the troubled technology company on August 1.
It will be the first time that Japanese conglomerate will not be included in the list of Japan’s top 225 companies since the Nikkei 225 index was formed in 1950. Instead it will be demoted to the second tier of the Tokyo Stock Exchange, after it fell into negative shareholder equity following major losses in its US nuclear business, Westinghouse.
Since declaring its nuclear arm bankrupt, Toshiba has been desperately attempting to recoup funds by selling off other branches of its business. In particular the company has been keen to cash in on its multi-billion dollar chip business. However, a legal tug-of-war with partner Western Digital has so far prevented any potential sale from going ahead.
The ongoing legal battle over the sale of Toshiba’s valuable chip unit could be resolved as soon as July 14. In response to Western Digital’s injunction request, Toshiba has filed an Opposition that will be heard by the Superior Court of California. If the Opposition is upheld then a deal for the company could finally be pushed through.
Toshiba had hoped to tie up a deal by the end of June, but an injunction request from company partner Western Digital prevented any sale from being finalised. It was reported in June that the company had given shareholders until the end of the month to decide on a potential buyer. But the last minute request from Western Digital scuppered that plan.
All of this comes in an effort to make up the $18 billion it needs pay off huge loans it has accrued. The nature of the sale has seen the Japanese government heavily involved, with emphasis being placed on keeping the firm within the country.
Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 has led to massive scandal and loses for its parent company. Last month Westinghouse filed for a Chapter 11 bankruptcy and Toshiba is attempting to split from the company. Since revealing its financial turmoil a number of investors have shown an interest in Toshiba’s technology businesses.