Toshiba told shareholders on Monday it now intends to separate the company into two standalone companies, instead of three, as it had previously announced.

Under the revised plans, Toshiba and Infrastructure Service Co will remain as one entity, while Device Co will be spun out, as initially planned.

In this latest restructure, Toshiba and Infrastructure Co will consist of Toshiba's energy systems, infrastructure systems, building solutions, and digital solutions businesses, in addition to Toshiba's ownership stake in Kioxia Holdings Corporation (KHC).

This will leave Device Co with Toshiba's electronic devices and storage solutions business.

The company said the decision to separate into two independent businesses follows the board's "thorough review" of its reorganisation plan and processes.

"After further engaging with key stakeholders and completing the additional analysis, we determined that separating Toshiba into two standalone companies and divesting certain non-core assets is in the best long-term interests of our company and its shareholders, customers, business partners and employees," Toshiba interim chair, president and CEO Satoshi Tsunakawa said.  

"The refined strategic reorganisation plan creates two distinctive companies that are well-positioned to take advantage of their unique strengths and business cycles.

"We will be able to deliver these benefits while providing a clearer path to completion, reducing the associated costs, maintaining tax-free status and keeping to our stated timeframe of completing the spin-off in the second half of FY2023."

The Japanese company added it expects Toshiba and Infrastructure Services Co will achieve net sales of