Toshiba Warns of ¥1 Trillion Annual Loss on Westinghouse Bankruptcy (News)
Tokyo, March 29 (Jiji Press)—Toshiba Corp. said Wednesday its consolidated net loss for the current business year could total ¥1.01 trillion, far exceeding its February estimate of ¥390 billion, due to its debt guarantee for US subsidiary Westinghouse Electric Co., which filed for Chapter 11 protection from creditors with the bankruptcy court in New York the same day.
Toshiba Nuclear Energy Holdings (UK) Ltd., which owns non-US firms having close ties with Westinghouse, also filed for Chapter 11 protection with the same court.
Having filed for Chapter 11 protection, Westinghouse Electric will be removed from Toshiba’s consolidated accounts, thus enabling the Japanese parent firm to speed up its exit from all overseas nuclear plant operations.
At a press conference in Tokyo, Toshiba President Tsunakawa Satoshi described this as a needed first step toward restructuring the Toshiba Group, which is seeing positive signs in other areas of its business. Estimates are that Toshiba will set a new record for annual losses at a Japanese manufacturer in fiscal 2016, ending on March 31, surpassing Hitachi Ltd.’s ¥787.3 billion in red ink in fiscal 2009. Toshiba estimates that its negative worth will stand at ¥340 billion at the end of the month.
One bright spot is the company’s mainstay flash memory business, which Tsunakawa noted is continuing to rise in value. Toshiba could raise some ¥2 trillion in needed funds by selling off its flash memory operations.[Copyright The Jiji Press, Ltd. Content edited by the Nippon.com editorial team.]