Toshiba Sees 110 Billion Yen Loss on Tax Impact of Chip Sale

Toshiba Sees 110 Billion Yen Loss on Tax Impact of Chip Sale
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Toshiba forecast an annual net loss of 110 billion yen ($968 million) on the tax impact of selling its memory chip division to a group led by Bain Capital, according to Bloomberg.

The company revised its forecast from an earlier estimate of 230 billion in net income, according to a statement. The company left its operating profit and sales forecasts for the year ending March unchanged. Toshiba said the sale will be recognized for tax purposes as a non-qualified split, after it separated its memory business to secure the injection of capital from the Bain consortium.

Toshiba’s shareholders are expected to approve the 2 trillion yen sale of the memory chip business at a general meeting, helping the company avert a capital deficit that could lead to its delisting. The Bain consortium includes major technology players Apple, Dell, SK Hynix and Japan’s Hoya, while Toshiba itself will maintain a stake. The proceeds would result in a 1.08 trillion yen improvement in its shareholders’ equity, the company said.

The Japanese company is clawing its way back after an accounting scandal in 2015 that was followed by a multibillion-dollar loss in its nuclear operations in the U.S. The Tokyo Stock Exchange earlier this month removed Toshiba from its watchlist for delisting citing better internal controls and efforts to improve corporate governance.