TOKYO—Toshiba Corp. on Friday said it is considering selling part of its semiconductor business to raise financing in response to a drawn-out accounting scandal.

Toshiba Chief Executive Masashi Muromachi said the company is weighing the sale of a stake in the chip arm via a stock-market listing or a transaction with another company. The semiconductor business has been the main moneymaker for Toshiba in recent years, as the fortunes of its personal-computer, consumer-electronics and nuclear-operations have worsened.

Mr. Muromachi said at a news conference that Toshiba would keep control of the chip arm, and he added that no sale is imminent. "It is a core business for us, so we won't completely detach the business from the group," he said.

Toshiba sells memory chips to Apple Inc. and other smartphone makers, but the semiconductor business requires continuous investment to maintain its competitiveness against rivals such as Samsung Electronics Co.

In the wake of the accounting scandal, Toshiba's ability to raise funds has been squeezed. The company says it overstated profits by ¥ 155 billion ($1.3 billion) over seven years. Toshiba shook up its management and board this summer in response, but disclosures have continued to trickle out.

Toshiba earlier this month said its U.S. nuclear unit, Westinghouse Electric Co., booked $1.3 billion in previously undisclosed impairment charges for the 2012 and 2013 fiscal years. Though many analysts expect Toshiba to take a similar write-down to reflect the Westinghouse charges, executives on Friday reiterated that they saw no need to do so.

In the most detailed explanation to date of Westinghouse's financial situation since the accounting problems came to light earlier this year, Toshiba said the U.S. unit has incurred a cumulative operating loss of $290 million since Toshiba bought it 2006. Previously, Toshiba had said Westinghouse was profitable, without specifying a time frame.

Toshiba said its nuclear-fuel and plant-maintenance business remains profitable, and said the area is likely to grow as the number of active nuclear power plants increases globally. Demand for new plants has collapsed since the Fukushima disaster in Japan in 2011, but Toshiba officials said it should rebound as global demand for cleaner energy rises.

"There is no way the U.S. can meet its clean-energy projections and not increase its nuclear power generating capacity," Westinghouse Chief Executive Danny Roderick said in an interview.

Toshiba said it is also aiming to take on reactor-decommissioning projects, which should bring additional revenue.

Analysts expressed skepticism about Toshiba's plans for Westinghouse, saying they may be too optimistic. For the fiscal year ending in March, Toshiba expects to book an operating profit of ¥ 30 billion from its nuclear business. It hopes to post an average operating profit of ¥ 150 billion a year from fiscal 2018 through 2029.

"The presented business outlook is unrealistic in many aspects," said Hideki Yasuda, an analyst at Ace Research Institute. "For one, Westinghouse would need to hire a whole lot of workers to achieve the plan."

Mass hires might be unrealistic when Toshiba is focusing on cuts. The Tokyo Stock Exchange has placed Toshiba on a watch list, making it difficult for the company to issue new shares or debt.

In addition to the possible sale of a stake in the semiconductor arm, Toshiba has been trying to sell a stake in Westinghouse.

Mr. Roderick said Toshiba wanted to maintain control of Westinghouse and would limit any such transaction to the 20% stake that Toshiba acquired from Shaw Group Inc. in 2013. But he said Toshiba was struggling to find a buyer that would be willing to accept a minority share.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com and Eric Pfanner at eric.pfanner@wsj.com

 

Access Investor Kit for "Apple, Inc."

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US0378331005

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 27, 2015 08:35 ET (13:35 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Apple Charts.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Apple Charts.