Skip to main content

Toshiba Corp., which is undergoing a business restructuring, will book a loss of about ¥700 billion in its consolidated accounts for the April-to-December 2016 period due to a writedown in its U.S. nuclear business, The Yomiuri Shimbun has learned. Due to the massive loss, Toshiba appears likely to have temporarily fallen into insolvency because its debts exceeded its assets. The company will make an announcement on Tuesday.

According to sources, Toshiba plans to bolster its own capital by using profits from the sale of some shares of a semiconductor business it will make a subsidiary, and aims to avoid insolvency when closing its accounts at the end of March.

Toshiba is reviewing the value of a nuclear construction business purchased in 2015 by Westinghouse Electric Co., a Toshiba subsidiary. Westinghouse and the construction company are involved in building four nuclear reactors. Construction has been significantly delayed due to stricter safety standards introduced following the March 2011 accident at the Fukushima No. 1 nuclear power plant operated by Tokyo Electric Power Company Holdings, Inc. This has caused losses to snowball, but they have mostly been finalized through discussions with auditors and other parties.

Toshiba’s business performance deteriorated after revelations of an accounting scandal in 2015, and its own capital had fallen to about ¥360 billion as of the end of September 2016. As the losses were booked, Toshiba seems to have been insolvent as of the end of 2016. However, its semiconductor business has been performing well and Toshiba forecasts it will build up profits considerably through the end of March.

To prevent its financial position from worsening, Toshiba plans to split its semiconductor business and sell less than 20 percent of its shares in a new company it will create. According to sources, Toshiba hopes to book a profit of at least about ¥200 billion from this.

If you like something I've posted please feel free to click the "like" button!

Original Post

Add Reply

Post
×
×
×
×
Link copied to your clipboard.
×
×