{"id":21975,"date":"2017-02-13T06:58:00","date_gmt":"2017-02-13T06:58:00","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=21975"},"modified":"2017-02-13T06:58:31","modified_gmt":"2017-02-13T06:58:31","slug":"toshiba-prepares-to-unveil-nuclear-hole-other-perils-threaten","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/toshiba-prepares-to-unveil-nuclear-hole-other-perils-threaten.html","title":{"rendered":"Toshiba prepares to unveil nuclear hole, other perils threaten"},"content":{"rendered":"

\n\tToshiba prepares to unveil nuclear hole, other perils threaten<\/span><\/strong><\/span>
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\n\tToshiba prepares to unveil nuclear hole, other perils threaten:- Toshiba Corp (6502.T) will on Tuesday detail a writedown of close to $6 billion after bruising cost overruns at its U.S. nuclear arm, turning investor attention to the Japanese group's efforts to fix that and other balance sheet headaches.<\/span><\/span>\n<\/p>\n

\n\tThe TVs-to-construction conglomerate warned of a potential multi-billion dollar nuclear writedown in December, a year after a $1.3 billion accounting scandal.<\/span><\/span>\n<\/p>\n

\n\tSources familiar with the matter say the final charge, to be detailed alongside quarterly earnings, will be as high as 700 billion yen ($6.2 billion), a sum which alone would wipe out the company's shareholder equity.<\/span><\/span>\n<\/p>\n

\n\tToshiba, which has seen its market value almost halve since the prospect of a writedown emerged in December, is also expected to outline the prospects for its nuclear arm and update investors on efforts to raise capital, including through the sale of a stake in its flagship memory chips business.<\/span><\/span>\n<\/p>\n

\n\t"The question for Toshiba is how is it going to move forward," said Masahiko Ishino, analyst at Tokai Tokyo Research Center.<\/span><\/span>\n<\/p>\n

\n\tHe added Toshiba would need to show how it could stay competitive in the cash-generating but capital-intensive memory chip industry, given its battered balance sheet.<\/span><\/span>\n<\/p>\n

\n\tToshiba has offered a 19.9 percent of its prize chips business to investment funds and rivals including Bain Capital, SK Hynix (000660.KS) and Micron Technology (MU.O).<\/span><\/span>\n<\/p>\n

\n\tPILLAR OF BUSINESS<\/span><\/span>\n<\/p>\n

\n\tOn Thursday, a source said that Toshiba had received bids of between 200 billion yen to 400 billion yen for the flash memory stake, a range that could cover the 300 billion yen the company wants to raise. It prefers multiple investors.<\/span><\/span>\n<\/p>\n

\n\tToshiba is a pillar of Japan's business establishment. Born in the tumult of Japan's emergence from centuries of isolation, it made Japan's first light bulb and was a pioneer in laptop computers. Toshiba's 190,000 workers, employed at some 500 units, likely will make it too big to fail.<\/span><\/span>\n<\/p>\n

\n\tBut as with other established Japanese firms that have dodged financial collapse, such as liquid crystal display inventor Sharp Corp (6753.T), Toshiba could face protracted pain.<\/span><\/span>\n<\/p>\n

\n\tFinancial sources last week pointed to problem businesses within Toshiba beyond nuclear, including Landis+Gyr AG.<\/span><\/span>\n<\/p>\n

\n\tToshiba agreed to buy that unlisted meter maker for $2.3 billion in 2011 to tap smart grid demand that at the time was expected to grow six-fold to around $70 billion in 10 years. At the end of September, the goodwill value of Landis+Gyr was 143.2 billion yen ($1.3 billion).<\/span><\/span>\n<\/p>\n

\n\tOther stumbling blocks for Toshiba include a $7.4 billion commitment four years ago to buy U.S. liquefied natural gas believing that would help sell power plant turbines.<\/span><\/span>\n<\/p>\n

\n\tACCOUNTING SCANDAL<\/span><\/span>\n<\/p>\n

\n\tA fall in Asian gas prices, now at about half the level they were, has cast doubt on that strategy.<\/span><\/span>\n<\/p>\n

\n\tToshiba, on a stock exchange watchlist barring it from issuing new shares, must also contend with fallout from the 2015 accounting scandal.<\/span><\/span>\n<\/p>\n

\n\tMitsubishi UFJ Trust and Banking Corp (8306.T) last month said it will seek 1 billion yen in damages, while sources say Sumitomo Mitsui Trust Bank Ltd and Mizuho Trust & Banking Co are preparing similar suits.[nL4N1FK07I}<\/span><\/span>\n<\/p>\n

\n\tWith its latest financial crisis unresolved, investors appear most nervous about Toshiba's short-term prospects.<\/span><\/span>\n<\/p>\n

\n\tThe cost of insuring against a credit default has soared over the past two months. Five-year insurance, or credit default swaps, was quoted at 315\/355 basis points TOSB5YJPAC=MG on Friday, compared with 75 basis points in mid-December.<\/span><\/span>\n<\/p>\n

\n\tSource:- http:\/\/in.reuters.com\/article\/us-toshiba-accounting-idINKBN15R11O<\/span><\/span><\/p>\n

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