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The Japanese corporation watched its stock tumble by as much as 15% in today's trading session as a result of Nikkei Asia report claiming that the losses of Toshiba's U.S. nuclear business will be much higher than expected.

Nikkei Asia reported today that the losses related to Toshiba's (TYO: 6502) nuclear business in the United States could exceed the previously suggested 500 billion yen ($4.4 billion) and reach as much as 700 billion yen ($6.1 billion). Shortly after the announcement, Toshiba's shares dropped by 15% as investors doubted the company's ability to deal with the growing crisis.

The problem with heavy cost overruns related to Toshiba's recently-acquired nuclear power company Westinghouse Electric was first revealed in December, although back then, the company talked about write-downs of between $1 billion and $4.5 billion, at worst. Yet now, that number ballooned to somewhere between $5 billion and $8 billion, said Financial Times. With that in mind, Toshiba's current shareholder equity that amounts to about $3.2 billion will not be nearly enough to cover for the write-down costs suggested both by Nikkei Asia and other analysts.

Toshiba stock tumbles 20% on fears of multi-billion dollar write-down

This is exactly why Toshiba's investors pressed the sell button today since their fears of the growing losses were confirmed by the reports. So far, Toshiba's officials have not provided a comment on the newly-discovered reports, although they confirmed back in December that the cost write-downs related to the Westinghouse Electric business were likely to amount to “several billion US dollars, resulting in a negative impact on Toshiba’s financial results”, reported The Guardian.

Reuters adds that some sources familiar with the matter said that Toshiba's executives will hold a meeting with the bank representatives to discuss financial help possibilities. One of Toshiba partner banks, the state-backed Development Bank of Japan, was claimed to be interested in supportingToshiba's business. Next to that, the company said just a day before Nikkei Asia's report was out that it planned to spin off its semiconductor business in order to make up for financial losses. Back then, an American company Western Digital was named as a potential buyer, although Nikkei said earlier today that the Development Bank of Japan was also interested.

After the semiconductor business is spun off from the main company, Toshiba plans to sell approximately 20% of its stake for about $1.7 billion -$2.6 billion, said Fortune.

"It is true that we are discussing a spin-off of our memory chips business, but nothing has been decided," the company said in a statement on Wednesday, reported Reuters.

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