Toshiba Chairman Steps Huge Nuclear Business Loss
The massive hit dragged the struggling
conglomerate to a net loss of $4.4 billion for the nine months ending December
31, raising concerns about whether it can survive its latest financial woes.
Chairman Shigenori Shiga is resigning
to take responsibility for the widening crisis, Toshiba (TOSYY)
said late Tuesday.
The bombshell announcements capped a
manic day during which the company's stock plunged as much as 10% after it
missed its own deadline to report earnings.
The iconic Japanese firm first warned
in late December that it would lose several billion dollars from having to
write down the value of the U.S nuclear construction business acquired in 2015.
But the figure it announced Tuesday was even bigger than initially feared.
Toshiba
shares closed down 8% for the day and have almost halved in value since news of
the massive loss first emerged.
The
company said the numbers it announced Tuesday are only provisional. It doesn't
expect to be able to announce audited results until it's finishing
investigating concerns about the accounting process at the U.S. nuclear
division.
The
earnings report and high level resignation weren't the only bits of unsettling
news circulating Tuesday.
The
Nikkei newspaper reported
that Toshiba could warn that it may not be able to keep operating as "a
going concern," raising fears of bankruptcy.
Toshiba
declined to comment on the report.
The
company's U.S. subsidiary Westinghouse acquired nuclear construction business
CB&I Stone and Webster in late 2015.
The
acquisition was supposed to help Westinghouse complete nuclear reactor projects
in Georgia and South Carolina. But the U.S. projects are running way over
budget and behind schedule.
Toshiba
later admitted it may have overestimated the value of CB&I Stone and
Webster.
Toshiba
is one of Japan's best known multinational corporations, tracing its history
back to the late 19th century.
The
company made Japan's first light bulb and manufactured the country's first
electric washing machines and refrigerators.
It
now makes everything from 3D TVs to memory chips, and had turned to nuclear
plant construction to try to help it recover in the wake of a massive $1.2
billion accounting scandal.
There
were signs of a turnaround last year, Toshiba reported earnings of 115 billion
yen ($977 million) through the first six months of 2016.
But
now the company is back on shaky ground, and Toshiba admits the huge investment
in the nuclear business may have been another misstep.
"We
may revise the positioning of nuclear business in the future if it's
needed," CEO Satoshi Tsunakawa said in December.
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