Toshiba Names Former Banker as CEO

Toshiba Corp. appointed a former banker from a key creditor bank as CEO and forecast its first annual profit in four years, making progress in its efforts to recover from billions of dollars in losses.

The Japanese conglomerate is bringing in an outsider to lead the Japan electronics maker battered by accounting scandals, record losses and downsizing.

Nobuaki Kurumatani, representative director of CVC Capital Partners Ltd. in Japan and former vice president at Sumitomo Mitsui Banking Corp., will become chief executive officer and chairman of Toshiba Corp., the Tokyo-based manufacturer said in a statement Wednesday.

Current CEO Satoshi Tsunakawa who has overseen Toshiba's efforts to dig itself out of its financial crisis, will become chief operating officer and be responsible for day-to-day operations.Their roles will be effective from April 1.

Toshiba is in the process of selling the crown-jewel memory unit to a group led by Bain Capital to prevent de-listing after billions of dollars of losses in its nuclear energy operations.

                 

The incoming CEO will face the challenge of restoring confidence in the 143-year-old conglomerate and finding ways to achieve growth without the key engines of semiconductors and nuclear power.

“I will draw on all my experience and devote all my efforts to rebuilding Toshiba Group, by recovering and strengthening its financial base,” Kurumatani, 60, said in the statement.

Boosted by its chip business, the struggling industrial conglomerate predicted net profit of 520 billion yen ($4.9 billion) for the year ending March, up from a prior forecast of a 110 billion yen loss and much higher than a consensus estimate of a 188 billion yen profit.

The revised estimate comes on the back of a sale of Toshiba's claims against now-bankrupt Westinghouse Electric Co. LLC to a group of hedge funds, a deal that also affords the Japanese firm tax benefits.

The return to net profit, along with an additional 600 billion yen gained from the issue of new shares to overseas funds, will help Toshiba avoid falling into negative net worth for a second consecutive year, allowing it to remain a listed company.

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