Toshiba shares drop after plan to issue $5.4 billion in new shares

TOKYO (Reuters) - Shares of Toshiba Corp fell nearly 5 percent early on Monday, a day after the troubled conglomerate said it would raise 600 billion yen ($5.4 billion) from a sale of new shares in a key step that would allow it to stay publicly traded.

Toshiba’s board met on Sunday to approve the plan, which would plug a balance sheet hole left by the company’s bankrupt U.S. nuclear power business. The share sale, amounting to roughly half the company’s current market value, and tax write-offs would boost Toshiba’s assets back above liabilities.

The plan, reported by Reuters earlier this month, would help Toshiba avoid being delisted even if the $18 billion sale of its prized chip unit to a conglomerate led by Bain Capital is delayed beyond the March deadline.

Toshiba’s shares lost as much as 4.8 percent in early trade, against a 0.5 percent fall in the benchmark Nikkei average.