March 24, 2017

Toshiba considering total sell off of chip business

16 February 2017, 12:56 | Ella Tate

Ailing Toshiba looks to book ¥500 billion April-December loss

Toshiba’s Nuclear Reactor Mess

The UK's nuclear company, NuGen, a joint venture between Japan's Toshiba and France's ENGIE, reassured the country Tuesday Toshiba remains committed to developing its Moorside project, Kallanish Energy reports. The company said it may have to book several billion dollars in charges related to a US nuclear power plant construction company acquisition, rekindling "concerns about its accounting acumen".

Toshiba will be downgraded to the Tokyo Stock Exchange's second section from the first section if it posts excessive liabilities for the year through March.

Last month the company announced its United States subsidiary, Westinghouse Electric, may have overpaid - by several billion dollars - for another nuclear construction and services business.

Toshiba bought the US-based Westinghouse Electric Company, nuclear energy business in 2006 for $US5.4 billion ($AU7.1 bn), but it suffered from rising cost overruns on two key projects.

Toshiba said its net worth was in the negative, at minus 191 billion yen ($1.7 billion) at the end of a year ago, but the company hopes to fix that by the end of March. In 2015, Toshiba declared its nuclear business was more profitable now than when the company acquired it, but scandals over the Japanese firm's accounting broke soon thereafter.

Whistleblowers have flagged concerns that senior management at Westinghouse exerted "inappropriate pressure" to advance the acquisition process, Toshiba said.

NuGen CEO Tom Samson said: "The project has made significant progress since Toshiba took over as major shareholder in 2014".

The results have yet to be approved by the company's auditor and have been released as guidance, Toshiba said.

As a result shareholders' equity at the end of December was minus $1.7 billion.

Toshiba announced yesterday it would reduce its exposure to reactor construction projects outside Japan.

It is speculated that Toshiba will dramatically reduce its nuclear operations and stop building new atomic power stations.

Efficiency moves expected at CB&I Stone & Webster never played out, resulting in a huge overvaluation of the company's worth that led to the huge losses.

It can't raise money on the stock exchange due to the exposure of accounting irregularities past year. The company also downgraded its earnings projection for the full year through March to a 390 billion yen loss, from the previous estimate of a 145 billion yen profit.

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