Shares of Toshiba Corp., which had been demoted to the Second Section of the Tokyo Stock Exchange due to poor business performance, returned to First Section trading Friday after about a 3-1/2-year absence.
By liquidating unprofitable businesses and cutting costs, the company has achieved a certain level of business reconstruction. In the future, the key will be whether the company can get on a growth path by making renewable energy sources such as solar and wind power a new pillar of its business.
Toshiba President and Chief Executive Officer Nobuaki Kurumatani said Friday: "Our return to the First Section of the TSE marks a major turning point for our company, which is in the process of rebuilding itself. As a day for Toshiba to restart operations, we would like to work hard to improve the value of our operations."
The return to the TSE's First Section is expected to boost Toshiba's creditworthiness and make it easier to raise funds.
On Friday, the electronics and machinery maker's share price closed at 3,415 yen. Before it was announced on Jan. 22 that Toshiba would return to the First Section, it's share price was hovering around 3,000 yen.
Toshiba was found to have padded its profits in 2015. The company was demoted to the Second Section in 2017 after it became insolvent following huge losses in its U.S. nuclear business.
After that, its excessive liabilities were resolved by a capital increase at the end of the year. However, the company has sold its core semiconductor memory business, and sales are expected to fall sharply from its peak of 7.2 trillion yen in the fiscal year that ended in March 2008 to 3.09 trillion yen in 2021.
According to its midterm business plan revised in November last year, the company aims to achieve growth in renewable energy and data-driven businesses.
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