Toshiba Corp. said Monday it has completed the sale of its liquefied natural gas operation in the United States to French oil giant Total S.A., letting go of an asset it deems risky as it continues to restructure.
Toshiba, which had announced the sales agreement with Total in June, sold Toshiba America LNG Corp. for $15 million on Friday after judging that the plan to procure U.S.-manufactured LNG for Japanese utility companies was unlikely to achieve profitability as LNG prices have declined.
Following the removal of Toshiba America LNG from its group, Toshiba is expected to book a loss of around 90 billion yen ($847 million) in the current fiscal year to March. It will pay the French energy company $815 million to take on contracts to which the group had committed.
In 2013, the company said it had signed a deal with a U.S. firm to secure rights to process U.S.-produced natural gas into 2.2 million tons of LNG annually over 20 years from 2019.
The sale of the LNG business to the Singapore affiliate of Total comes after Chinese chemicals maker ENN Ecological Holdings Co. scrapped a plan to buy it due to failure to receive early approval from U.S. and Chinese regulators.
Toshiba is continuing revamp efforts following an accounting fraud scandal that came to light in 2015 and the bankruptcy of its U.S. nuclear power subsidiary Westinghouse Electric Co. in 2017.
© Kyodo News International, Inc., source Newswire