Our purpose is not to complement the previously cited literature in evaluating the diversification strategy of Japanese firms, but instead to focus on portfolio restructuring in Japan from the perspective of both divesture activities and related-asset expansion activities.
Firms with close bank ties face less pressure to make abrupt cuts in employees or engage in divesture restructuring because they are assured of funding, even given a poor performance (Hoshi/Kashyap 2001).
TRI expects the divesture to be completed before the end of the year.
Fitch believes that the divesture will have a nominal increase on leverage (increase gross and net leverage by less than 0.
The 142 basis-point increase was driven by higher incentive compensation, store divesture
expenses and continued strategic capability investments to improve the Company's gross profit rate and accelerate the Commercial business.
Adjusted operating income (operating income before loss on product divestures
, litigation settlement and executive severance charges) for the fiscal year rose to $75.
The downgrade also reflects Fitch's concerns about maintaining production levels post divestures
as well as the company's long-term ability to replace reserves at economic costs.
Ian Shaw was Vice President Finance & CFO of the company from April to October 2004 and brings over thirty years of senior executive experience in the exploration and mining industry in accounting, finance, mergers, divestures
, and regulatory compliance.
We believe this evaluation and resultant growth strategy will strengthen the Company and produce transactions such as we announced today, as well as complementary acquisitions, potential divestures
and continuing realignment of the Company's operational infrastructure.
While USM used proceeds from asset divestures
to offset costs with the footprint expansion, Fitch believes the company does not produce sufficient free cash flow to make up for the operating losses and higher capital expenditures associated with the developing markets.