By Dhirendra Tripathi

Investing.com – Toshiba stock (T:) closed 1.6% higher in Tokyo after dropping its previous plan to split into three and instead go for a two-way division to pacify foreign investors.

The revised plan will see it spin off electronic storage devices and solutions before March 2024. It will retain its interest in Kioxia Holdings and the digital batteries operations, as well as its shares in energy systems solutions company.

Non-core businesses are also being exited. For $868 million, it will sell its 55% share in an air conditioner venture to Carrier. The company also intends to sell its lighting and elevator businesses.

In the original plan, there was a division of the company into two units: one to handle infrastructure, another electronic device and the third which would hold the Kioxia stake.

The plan met resistance especially from foreign investors that had large stakes following the 2015 accounting scandal.

Last month, shareholder, Singapore’s 3D Investment Partners, called the plan “the result of a flawed process” that failed to address the company’s underlying issues. According to it, Toshiba shouldn’t proceed with the separation plan until two-thirds support. It asked Toshiba’s strategic-review committee to consider alternatives, including selling the whole company to a private investor.

According to a January 18 letter by another investor, Farallon Capital Management, “the core issue afflicting Toshiba is the lack of trust between management and its shareholders, resulting in four years of prolonged conflict”.