TOKYO—The transfer of Toshiba Corp.’s U.S. LNG business to China’s ENN Ecological Holdings Co. has been delayed because a U.S. panel that monitors foreign investments has not yet approved the deal.
Toshiba in November agreed to pay ENN more than $800 million to take over its LNG business in the United States as part of a plan to shed money-losing assets.
Approval by the Committee on Foreign Investment in the United States (CFIUS) has been delayed because of the U.S. government shutdown earlier this year, a Toshiba spokesman said on April 4.
He said he was not aware the holdup was due to any issues from the investment.
The committee has blocked or delayed investments from China in the past due to concerns about security or transfers of U.S. technology.
Toshiba said earlier it expects to complete the transfer this month or “shortly thereafter.”
Exiting the U.S. LNG business was the disappointing culmination of a venture that puzzled analysts when it was announced in 2013.
Asian LNG prices have plunged since then and the potential for future losses spurred Toshiba’s exit.
Under the deal, Toshiba will sell its Toshiba America LNG Corp unit to ENN Ecological, a unit of ENN Group, for $15 million, the Japanese company said in November.
However, once that sale is complete, Toshiba will then make a one-off payment of $821 million to ENN to pass on its roughly $7 billion commitment, starting in 2020, to purchase 2.2 million tonnes per year of LNG over 20 years from Freeport LNG in Texas.
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