Delays, confusion as Toshiba reports $6 billion nuclear hit and slides to loss

Tue Feb 14, 2017 5:52am EST
 
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By Makiko Yamazaki

TOKYO (Reuters) - After a day of delays and confusion, Japan's Toshiba Corp (6502.T: Quote) said on Tuesday it expected to book a $6.3 billion hit to its U.S. nuclear unit, a writedown that wipes out its shareholder equity and will drag the group to a full-year loss.

Hours earlier on Tuesday, the battered conglomerate rattled investors by failing to release its earnings on schedule, saying initially it was 'not ready' and then announcing later it needed more time to probe its Westinghouse nuclear business after internal reports uncovered potential problems.

The figures eventually released were numbers that have yet to be approved by its auditor and Toshiba cautioned investors that a major revision was possible. Fully audited numbers are now not due till March 14 after the firm was granted a reprieve for its formal filing by Japanese regulators.

Toshiba also said in a statement it could push harder to raise capital, including selling a majority stake in its memory chip arm. Previously, it had sought to sell just under 20 percent of its prize business.

"Finally now people are starting to recognize that internal control problems, the accounting issues and governance issues are very real and no longer abstract," said Zuhair Khan, an analyst at Jefferies in Tokyo.

"They impact the viability of the company."

Shares in the group slid 8 percent, putting the company's market value at 973 billion yen ($8.6 billion), less than half its value in mid-December. Just under a decade ago, the firm was worth almost 5 trillion yen.

It also announced the first top-level departure since the nuclear problems were uncovered in December: chairman Shigenori Shiga, a former Westinghouse boss brought in to the top role last year after a $1.3 billion accounting scandal in 2015 shook up Toshiba's upper ranks.   Continued...

 
The logo of Toshiba Corp. are seen at the company's facility in Kawasaki, Japan February 13, 2017. REUTERS/Issei Kato