Late last year, Toshiba Corporation announced that it might have to take a multi-billion-dollar write-down on its U.S. nuclear plant construction company due to cost overruns and other issues. That write-down is now at $6.3 billion, and it has placed Toshiba Corporation in the position of putting its memory business up for sale to partially compensate for the loss.
Toshiba America Business Solutions (TABS), which includes the Toshiba brand MFP, document services, and digital signage businesses, released the following letter from company President and CEO Scott Maccabe. Its intent was to put the issue into the proper context for its customers and partners and to ease concerns over any negative impact on the TABS business.
Dear Valued Customers, Partners & Employees,
On February 14, 2017, Toshiba Corporation announced that it expects to record a $6.3 billion dollar write down on the value of its US nuclear unit. Due to the complexity of the ongoing discovery process, the company has delayed the release of its audited financial statements until March 14th.
Among the counter measures that the company is exploring is the sale of shares in its flash memory operations.
Your business partner, Toshiba America Business Solutions, Inc. (TABS), while a member of the Toshiba group of companies, is independent both financially and operationally from Toshiba Corporation. As such, the current issues surrounding Toshiba Corporation do not directly affect our ability to service our clients, invest in research and development or operate our business in the world-class manner to which you are accustomed.
TABS is owned in the majority by Toshiba Tec Corporation, an independently operated corporation.
Although Toshiba Corporation is its majority shareholder, Toshiba Tec is publicly traded on the Tokyo Stock Exchange. In fact, since the first announcement of the issues surrounding the nuclear business on December 27th, the value of Toshiba Tec shares has increased by 17% through February 14th.
While we understand that the stream of news surrounding Toshiba Corporation may cause concern, please be assured that TABS is strongly committed to remaining a leading provider of multifunction printers, managed document services and digital signage. We remain strong financially and operationally and are dedicated to continuing our award-winning levels of customer support.
Thank you for your continued support of Toshiba America Business Solutions, Inc.
President and CEO
While the TABS business has remained relatively strong, the situation with Toshiba Corporation bears watching. We will know more after the company releases its financial statement on March 14. That will likely provide more details as to how Toshiba Corporation will manage its way out of the crisis. The biggest remaining question for TABS and its partners is whether Toshiba Corporation will have to shed other assets to cover the loss. If so, will those assets include its shares in TABS parent company Toshiba Tec Corporation?
Maccabe’s letter should be reassuring to partners nonetheless. At the very least, it affirms that the company is working on a business-as-usual basis with no real disruption anticipated.