Toshiba Samsung Storage Technology Korea (TSST-K), a subsidiary of Toshiba Samsung Storage Technology (TSST), today filed for corporate rehabilitation proceedings with the Seoul Central District Court.
TSST is a joint venture between Toshiba Corporation and Korea’s Samsung Electronics Co., Ltd. (Samsung), and a Toshiba Group company, with 50.1% of its outstanding shares held by Toshiba.
The court will announce its decision on corporate rehabilitation proceedings within a month from today’s date. Unless the court dismisses TSST-K’s filing, TSST-K’s management will then meet with its creditors and other interested parties and present the corporate rehabilitation plan.
TSST was established as a joint venture between Toshiba and Samsung, with the parent companies holding 51% and 49% of the company's stock, respectively.
TSST-K was subsequently established as a wholly-owned subsidiary of TSST, and engaged in the optical disc drive (ODD) business. As demand for ODD has fallen, resulting in a significant deterioration in TSST-K’s performance, Toshiba decided in March 2014 to withdraw from the
ODD business, and to carry out a series of stock transactions that would transfer full ownership of TSST-K to Korea-based OPTIS Inc. (Optis) by 2017.
Based on this agreement, 49.9% of TSST-K's stock has been transferred to Optis. However, Optis's management initiatives and efforts to rebuild the business have been undermined by deep declines in product demand and prices.