Toshiba Corp. said Saturday it will sell its U.S. liquefied natural gas business to French energy giant Total SA after a previous deal with a Chinese gas firm was canceled earlier this year.
The U.S. LNG business has been a stumbling block to the Japanese electronics- and machinery-maker’s turnaround efforts as it is expected to incur up to ¥1 trillion in losses, sources familiar with the situation said.
Toshiba plans to complete the sale of the LNG business by the end of March, subject to U.S. and other regulatory approval. The company expects to book a charge of ¥93 billion in the year ending March 31 in connection with the sale.
The business involves processing shale gas produced in Texas into LNG for sale over a 20-year period starting in 2020.
The withdrawal from the U.S. LNG business, which Toshiba has categorized as one of its noncore operations, is a major part of its midterm business plan that has been in place since April.
In November last year, Toshiba reached an agreement to sell the LNG business to China’s ENN Ecological Holdings Co. by the end of March this year. In April, however, ENN canceled the deal after prolonged regulatory approval procedures in the United States and China.