Wednesday, December 8, 2021
اُردُو نیوز Newspaper Live-TV(UK) Live-TV(PK)
اُردُو نیوز Newspaper
Live-TV(UK) Live-TV(PK)

Toshiba woes intensify on reports of $6 billion writedown, shares plummet

Toshiba woes intensify on reports of $6 billion writedown, shares plummet
January 19, 2017
TOKYO - Toshiba Corp's financial crisis deepened on Thursday as media reported it may book a bigger-than-expected $6 billion writedown on its US nuclear business, sending its shares sliding 15 percent. The reports cast doubt on whether measures the beleaguered industrial conglomerate is expected to take to bolster its finances - including the sale of a stake in its chip business - will be sufficient to address any shortfall. Toshiba has also approached government-backed Development Bank of Japan (DBJ) for assistance, said a source with knowledge of the matter, who was not authorized to speak on the matter and declined to be identified. Other sources said Toshiba executives will sit down with representatives from its main banks as early as Thursday to discuss possible support. The president of Sumitomo Mitsui Banking Corp, one of its main banks, told a briefing the lender would like to support Toshiba as much as possible. Representatives for DBJ and Mizuho Bank were not immediately available to comment. Sumitomo Mitsui Trust Bank, another main bank, declined to comment. Battered by an accounting scandal in 2015, Toshiba was suddenly plunged back into crisis late last year after it emerged that it would have to write down cost overruns at projects handled by a newly acquired U.S nuclear power plant construction firm. Sources familiar with the matter had previously flagged the size of the expected charge at more than 500 billion yen ($4.4 billion). Kyodo news agency and other domestic media said that estimates had now ballooned to 700 billion yen, in part due to unfavorable currency rates. Toshiba declined to comment on the reported writedowns and its plans for meeting with banks. Put on the Tokyo bourse's watchlist after the accounting scandal, the laptops-to-nuclear conglomerate is not able to tap equity markets for funding. It has said it is looking at splitting off its chips business - which accounts for the bulk of its operating profit - into a separate company. It wants to sell a minority stake in the semiconductor business and is considering potential buyers including U.S. partner Western Digital Corp, said a source familiar with the matter this week. Western Digital has declined to comment. Media reports have put the size of that stake sale at around 20 percent. Toshiba's chips unit could be worth more than 1 trillion yen ($8.9 billion), industry sources have previously said. "The key thing to watch here is whether Toshiba's liabilities will exceed its assets. If that happens it will be difficult for some banks to step up with new financing," said Mana Nakazora, chief credit analyst at BNP Paribas.