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Letter: Injection press business not impacted by Toshiba Corp. financial issues

By Bill Bregar | PLASTICS NEWS

Injection molding machinery company Toshiba Machine Co. Ltd. says it will not be impacted by financial problems at Japanese industrial conglomerate Toshiba Corp.

Toshiba Corp. warned investors April 10 that serious problems with its U.S. nuclear power subsidiary, Westinghouse Electric, means Toshiba might not survive as a going concern.

But Toshiba Machine officials say their operations are safe.

Toshiba Corp. owns 2 percent of the shares of Toshiba Machine, according to a March 3 letter to Toshiba Machine's North American employees.

"As a result, they are no longer the top shareholder and we no longer belong to the Toshiba Group," the letter said.

On March 3, Toshiba Machine bought back 18.1 percent of the total shares of its stock from Toshiba Corp., in a transaction valued at 15.3 billion yen (US $139.5 million). Toshiba Corp. had owned 20.1 percent of the injection press company before that buyback.

There will be no changes to Toshiba Machine's relationship with its business partners and customers, "and there is no damage to our financial soundness as a result of this transaction," the letter said.

Toshiba Machine makes injection molding machines in a factory in Shanghai, in addition to production in Japan, Thailand and India.

In a stock market filing in Japan, Toshiba Corp. said the Westinghouse troubles have created "substantial uncertainty" about its ability to remain as a going concern. Westinghouse filed for Chapter 11 reorganization on March 29.

Still, in an April 11 filing, Toshiba Corp. said the rest of its businesses are doing pretty well.

"Excluding the overseas nuclear power business, which generated a huge loss, almost all business segments have reported fairly healthy operations," Toshiba Corp. said in the filing.

Toshiba also is looking for investors for its microchip business, "up to a majority holding." The company separated its prized microchip business into Toshiba Memory Corp. on April 1.

That move, combined with pay cuts for executives and bonus cuts for executives and employees, and other measures, means "Toshiba is sure that it will be able to secure a sufficient financial base," the filing said.

Toshiba Machine officials expect to issue a news release in the coming weeks. Contacted April 11, officials at Toshiba Machine Co. of America declined to comment.

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