Toshiba, televisions, TV

Hard on the heels of the bankruptcy filing of its U.S. nuclear power unit, Toshiba has warned that it may not be able to stay in business.

The warning came as the ailing Japanese conglomerate released unaudited third-quarter results showing it lost 648 billion yen ($5.9 billion) and projected a 1.01 trillion yen ($9.2 billion) for the full year ended in March.

“There are material events and conditions that raise the substantial doubt about the company’s ability to continue as a going concern,” Toshiba said Tuesday in a financial report that had been repeatedly delayed amid disputes with its auditors.

The nuclear unit, Westinghouse Electric, filed Chapter 11 last month and Toshiba has taken a $6.3 billion stemming from the subsidiary’s cost overruns at power plant projects in Georgia and South Carolina. The company is now hoping that the sale of its core Nand memory chip business will stave off financial disaster.

“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 apologizing to shareholders for Toshiba’s latest worrying turn.

But as The New York Times reports, the refusal of Toshiba’s auditor, PwC Aarata, to certify its third-quarter earnings is “a highly unusual signal of doubt about the company’s ability to recover its financial health.”

“Toshiba still has the support of its banks, which would be saddled with huge losses if they were to push the company into bankruptcy by calling in loans,” the NYT added. “But the auditors are, in effect, saying that Toshiba may need to undertake a more radical overhaul to ensure its survival.”

Toshiba’s writedown stemmed in large part from Westinghouse’s acquisition in 2015 of nuclear construction company Stone & Webster. The company said Tuesday that PwC had questioned whether there was a need to recognize losses linked to Stone & Webster in Toshiba’s accounts before the third quarter of its 2016 fiscal year.

According to Toshiba, investigations by outside lawyers that were commissioned by the Japanese group have found no evidence that it improperly recorded losses relating to Stone & Webster.

, , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *