Toshiba Sells Its $947 Million Stake in Elevator Maker Kone

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Toshiba Corp. sold its stake in Finnish elevator and escalator maker Kone Oyj for 865 million euros ($947 million) as the Japanese group moves to bolster its balance sheet amid a probe into accounting irregularities.

Toshiba sold its entire 4.6 percent stake in Kone, the Tokyo-based company said in a statement on Wednesday. The company expects a gain on the sale of about 113 billion yen ($913 million) with the shares sold for 35.75 euros apiece, or about 6 percent below Tuesday’s closing price of 38.05 euros.

Kone fell as much as 4.7 percent to 36.25 euros in Helsinki trading on Wednesday and was down 2.6 percent as of 3:42 p.m. local time.

Toshiba President Hisao Tanaka and his two predecessors quit on Tuesday after investigators found that the Japanese company inflated earnings by at least $1.2 billion since the global financial crisis.

Along with Tanaka, his predecessors Vice Chairman Norio Sasaki and adviser Atsutoshi Nishida also resigned to take responsibility for accounting irregularities that occurred under their watch. The company said it will correct earnings by at least 152 billion yen based on the results of an independent investigation of its books stretching back about six years.

Kazunori Matsubara, chief executive officer of Toshiba Elevator and Building Systems, resigned from Kone’s board following the sale of Toshiba’s stake, Kone said in a statement on Wednesday. The Finnish company said Toshiba’s stake sale doesn’t effect its strategic alliance with the Japanese company’s elevator subsidiary. Kone will keep a 19.9 percent stake in Toshiba Elevator and Building Systems.

Stakeholders in Europe have raised about $80 billion in additional share sales this year, taking advantage of investor appetite to exit stakes in listed businesses including Banco Santander SA and London Stock Exchange Group Plc.

UBS AG managed the Kone share sale, and was the sole bookrunner.

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