Toshiba, a pillar of the modern Japanese economy whose roots stretch back to the country’s industrial stirrings in the 19th century, warned on Tuesday that a disastrous foray into nuclear power may have crippled its business beyond repair.
The warning comes less than two weeks after it announced it was booking a $US9.9 billion ($13.2 billion) loss as Westinghouse Electric filed for bankruptcy.
Toshiba chief executive Satoshi Tsunakawa bows during a news conference at the company’s Tokyo headquarters in which he warned of the company’s financial position. Photo: Shizuo Kambayashi
In a stockmarket filing in Japan, Toshiba said losses associated with Westinghouse Electric, its troubled US nuclear power subsidiary, had created “substantial uncertainty” over its ability to continue as a going concern. The declaration lifts the stakes as Toshiba seeks outside investors for its coveted microchip business, a portion of which it is selling off to raise cash and stave off disaster.
Toshiba’s uncertain fate represents another blow for a country that has seen its dominance in a range of technologies eclipsed by rivals in South Korea and China.
Few companies have embodied Japan’s industrial might like Toshiba, whose products run the gamut from hair dryers to giant gas-fired electricity turbines, as well as nuclear reactors. But it has faced a spate of recent stumbles in core businesses as well as a scandal over falsified profits that came to light in 2015.
Toshiba said it hoped the planned sale of shares in its chip division, its crown jewel, would alleviate the uncertainty over its future. While Toshiba has not said exactly how much of the business it will sell, even a minority stake is expected to be worth several billion dollars.
Any stability, though, would come at a price. Toshiba would be parting with parts of its most profitable asset and giving a competitor – very likely a foreign one – a foothold in the market for flash memory drives, where Japan has managed to retain some of its long-held edge.
“We will do what we can to avoid being delisted from the stock exchange,” Satoshi Tsunakawa, Toshiba’s chief executive, said at a news conference after apologising to shareholders for Toshiba’s latest worrying turn. The company reported financial details for the quarter that ended in December after multiple delays and disputes with its auditors.
The financial problems are mounting.
The auditors have refused to certify Toshiba’s accounts – a highly unusual signal of doubt about the company’s ability to recover its financial health.
New York Times