The company is selling assets and delaying expensive layoffs to boost its coffers
Tokyo — Toshiba shares went into freefall on Thursday,
with the embattled stock down by nearly half since late December on
concerns about huge losses at its nuclear power business in the US. The
Tokyo-listed shares dived 16% to end the day at 242.3 yen after Japanese
media said the vast conglomerate could book losses of as high as ¥700bn
($6.1bn)
in the US unit.
The stock fell as much as 26% earlier in the day, its biggest intraday decline in more than four decades, according to Bloomberg. The eye-popping loss would force the company, which has been struggling to move past an embarrassing accounting scandal, to seek support from a government-backed lender, the Nikkei newspaper said.
Toshiba, one of Japan’s best-known firms, said exact figures were not finalised. "We are still discussing how to deal with this issue, and no concrete decisions have been made," it said on Thursday.
Toshiba, which makes everything from nuclear reactors to laptops, has fallen more than 45% since it warned in late December of a possible one-time loss on its US nuclear business. It said costs linked to the acquisition by its US subsidiary Westinghouse of a nuclear services company last year could come to "several billion US dollars" and dent its earnings.
On Thursday, Japan’s public broadcaster NHK said Toshiba had drafted a plan to sell more assets and delay expensive plans, such as layoffs, to boost its coffers by about ¥300bn.
Toshiba might spin off its semiconductor operations into a separate firm, among other efforts, in a bid to shore up its finances, NHK and the Nikkei said. Toshiba said on Wednesday that splitting its memory chip business was an option, but that no conclusion had been reached.
"There is a bigger sense of crisis than you would have imagined even a week ago," said Damian Thong, an analyst at Macquarie Group. "It seems like they are scrambling for a solution, something to announce to shareholders on the day of their next financial update."
Japan’s earning seasons gets into full swing later this month, but Toshiba has yet to announce when it will release its latest results. Toshiba’s nuclear woes are the latest blow to the once-proud pillar of corporate Japan, most notably a profit-padding scandal in which bosses for years systematically pushed subordinates to cover up weak financial results. In the aftermath, the company has been shedding businesses and announced the sale of its medical devices unit to camera and office equipment maker Canon.
Last month, Standard & Poor’s cut two of Toshiba’s credit and debt ratings by one notch each in response to the potential nuclear losses.
AFP/BDlive
in the US unit.
The stock fell as much as 26% earlier in the day, its biggest intraday decline in more than four decades, according to Bloomberg. The eye-popping loss would force the company, which has been struggling to move past an embarrassing accounting scandal, to seek support from a government-backed lender, the Nikkei newspaper said.
Toshiba, one of Japan’s best-known firms, said exact figures were not finalised. "We are still discussing how to deal with this issue, and no concrete decisions have been made," it said on Thursday.
Toshiba, which makes everything from nuclear reactors to laptops, has fallen more than 45% since it warned in late December of a possible one-time loss on its US nuclear business. It said costs linked to the acquisition by its US subsidiary Westinghouse of a nuclear services company last year could come to "several billion US dollars" and dent its earnings.
On Thursday, Japan’s public broadcaster NHK said Toshiba had drafted a plan to sell more assets and delay expensive plans, such as layoffs, to boost its coffers by about ¥300bn.
Toshiba might spin off its semiconductor operations into a separate firm, among other efforts, in a bid to shore up its finances, NHK and the Nikkei said. Toshiba said on Wednesday that splitting its memory chip business was an option, but that no conclusion had been reached.
"There is a bigger sense of crisis than you would have imagined even a week ago," said Damian Thong, an analyst at Macquarie Group. "It seems like they are scrambling for a solution, something to announce to shareholders on the day of their next financial update."
Japan’s earning seasons gets into full swing later this month, but Toshiba has yet to announce when it will release its latest results. Toshiba’s nuclear woes are the latest blow to the once-proud pillar of corporate Japan, most notably a profit-padding scandal in which bosses for years systematically pushed subordinates to cover up weak financial results. In the aftermath, the company has been shedding businesses and announced the sale of its medical devices unit to camera and office equipment maker Canon.
Last month, Standard & Poor’s cut two of Toshiba’s credit and debt ratings by one notch each in response to the potential nuclear losses.
AFP/BDlive
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