As reports continue to raise worries that Toshiba’s US nuclear power businesses may incur losses, the embattled Japanese conglomerate witnessed a decline in its shares.
It is feared Toshiba may have to write down the value of the unit by a larger-than-expected 700bn yen, reports Fortune.
Yet to be confirmed reports suggest that Toshiba has approached the Development Bank of Japan for aid.
The firm declined to give any comments regarding the DBJ perceived approach and said that the write-down figure had not been finalized.
The laptop manufacturer-turned-hydro newcomer fell into crisis in 2016 after revelation that it had been hit by high cost overruns on its newly purchased company for building US nuclear power plants.
Toshiba’s US operation Westinghouse bought Stone & Webster at a price of $229m in 2015.
However, in late December 2016, Toshiba approved claims that it was confronted with write-downs amounting to billion dollars. The company later on gave the biggest to be between $1bn and $4.5bn.
A third of the firm’s revenue is generated from its nuclear services business.
The Thursday poor performance of 26% was 50% lower than the write-down revelations, escalating fear that Toshiba lacks a firm grip on its final costs.
Centrally placed at Japan’s industrial development for decades, Toshiba is yet to recover from 2015 revelation that it has been overstating profits for 7 years.
It was as a result of the accounting scandal that made the company’s chief executive to resign.
Talks with the Banks
Some of the first newspapers to report that Toshiba had sought financial assistance from the country’s development bank are Reuters agency and Nikkei newspaper. The reports had also suggested that the company had plans to spin-off its profitable Nand computer memory division so as to get some money.
It is widely thought that Toshiba is in a close contact with the lenders.As reported by Reuters, more meetings are scheduled to take place this week.
The chief credit analyst at BNP Paribas, Mana Nakazora, said that “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.”
She added that she didn’t expect Toshiba to run into insolvency as more banks would step in to assist. Also, the most likely solution is capital from the government.
Toshiba released a statement on Thursday saying that it was still assessing how deep the write-down runs.
“We are still discussing how to deal with this issue, and no concrete decisions have been made,” the company said.