U.S. Fund Urges Toshiba to Boost Buyback

October 4, 2018

Tokyo- U.S. investment fund King Street Capital Management LP has called on Toshiba Corp. <6502> to increase its planned share buyback and carry out the transaction early.

King Street Capital, a major shareholder of the Japanese machinery maker, made the request in a statement Wednesday.

In June, Toshiba announced a plan to repurchase 700 billion yen of own shares.

The fund, however, requested the company to increase the amount to 1.1 trillion yen and conduct the buyback immediately after its announcement of a new business plan slated for November.

According to the statement, King Street Capital owns a 6.5 pct stake in Toshiba.

"Toshiba is severely undervalued," King Street Capital said. "The sooner Toshiba buys back its stock, the greater Toshiba's returns."

The fund went on to say, "Any delay or inefficient implementation of the buyback will...materially impair shareholder returns."

Noting that Toshiba holds a significant amount of money it gained from the sale of its flash memory unit, King Street Capital expressed its discontent, saying,

"The 700-billion-yen announced commitment is grossly insufficient." Jiji Press