The Japanese multinational Toshiba Corp said that it has completed the sale of its liquefied natural gas (LNG) operation in the United States to French oil giant Total SA, letting go of an asset it deems risky as it continues to restructure.
Toshiba, which announced the deal in June, sold Toshiba America LNG Corp. (TAL) for $15 million Friday after judging that the plan to procure U.S.-made LNG for Japanese utilities was unlikely to achieve profitability as LNG prices have sunk.
At the same time, Toshiba and Total also agreed that all contracts related to the LNG business entered into by Toshiba Group would either be transferred to Total or canceled, and that Total would provide a substitute guarantee to replace Toshiba’s then existing guarantee for all of TAL’s obligations under a liquefaction tolling agreement with FLNG Liquefaction 3, LLC, thereby releasing Toshiba from its guarantee of TAL.
With the completion of all necessary requirements and conditions including the Guarantee Release, the Transfer has been completed.
Following the completion of the Transfer, TAL has been deconsolidated from Toshiba Group, and Toshiba will record a loss, including related expenses, of approximately 90.0 billion yen in its consolidated business financials of fiscal year 2019, ending March 31, 2020.
Toshiba has already made a provision of 89.3 billion yen in its consolidated results of the first quarter of fiscal year 2019, ending March 31, 2020, as announced on August 7, 2019.
At the end of March 2020, Toshiba will determine whether it is necessary to book a loss on the valuation of stocks of Toshiba Energy Systems & Solutions Corporation (ESS) in its non-consolidated business results, by assessing ESS’s financial status and business plan at that time.
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