Toshiba Corp.'s shareholders approved a consolidation of the company's shares at an extraordinary meeting Wednesday, paving the way for its delisting from the Tokyo Stock Exchange on Dec. 20 and marking the end of its 74-year history as a public company.
The move will allow a consortium led by Japan Industrial Partners Inc. to buy the remaining shares it failed to acquire in its successful 2 trillion yen takeover bid for the troubled Japanese conglomerate, founded in 1875.
The intention behind the delisting is to sever ties with overseas activist shareholders, allowing the company to focus on growth areas such as social infrastructure and quantum technology, Toshiba has said.
"Toshiba has amazed the world with our incredible technology," Toshiba President Taro Shimada said at the meeting. "We'd like to make our innovative technologies shine across the world again under a stable shareholder base."
The JIP-led consortium acquired 78.65 percent of Toshiba's shares in the takeover bid, more than two-thirds of the total amount it needed for the consolidation proposal to be approved at the meeting.
Under the approved plan, 93 million shares will be consolidated into one stock, reducing general shareholders' holdings to less than one share. The consortium will then buy the remaining portion to make Toshiba its wholly-owned subsidiary.
"It is sad and disappointing" to see the company delist, Hiroshi Sukegawa, a 65-year-old shareholder and former Toshiba employee, told reporters before the meeting began. "It is Toshiba's duty to society that it rises again."
Toshiba, one of Japan's leading companies, started as an electric appliance maker and gradually branched out into new business sectors such as infrastructure and renewable energy.
But the company has been struggling to recover after running into a spate of problems in the 2010s, including a scandal related to overstating its profits in financial filings. It also incurred massive losses in its U.S. nuclear business in the same period.
The company increased its capital in 2017 by allotting about 600 billion yen worth of shares to third parties in a bid to improve its financial standing, leading to activist shareholders investing in the company.
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