Technology Basket Case Toshiba, Facing $10 Billion Dollar Loss
Toshiba, who has become a technology basket case is set to announce a $10 Billion-dollar loss, after filing for US bankruptcy protection after a disastrous foray into the US nuclear industry.
The scandal plagued Company, who sell computers, medical equipment and copiers in Australia are not saying whether their Australian operation will survive the savage cuts and sale of assets, that their parent Company has been forced to implement after directors were caught manipulating the Companies accounts.
Toshiba PR Company Ogilvy has not said whether the bankruptcy would affect the Australian operation who has had spending cut due to the Companies overseas problems.
The Japanese government confirmed on Wednesday that it was aware of Toshiba’s plans.
Toshiba initially alerted investors in December 2016 that it faced heavy losses linked to a deal done by Westinghouse.
Assets that it took on are likely to be worth less than initially thought and there is also a dispute about payments that are due.
As a consequence, Toshiba initially hoped to sell its majority stake in Westinghouse.
The Japanese company has twice given permission to delay reporting its earnings until 11 April.
The nuclear services business brings in about one-third of the industrial giant’s revenue.
Toshiba says it expects a A$10 Billion-dollar write-down when they announce their results in April.
The financial problems have some analysts speculating over whether the Japanese conglomerate can even survive the crisis, as it will probably be forced to sell many of its premium segments, such as the lucrative memory chip unit. They have already tried to flog their PC business to no avail.
So, while a Westinghouse bankruptcy might stop things from getting even worse for Toshiba, it is still not clear whether the struggling giant will manage to find its feet in time.
The Japanese government is unlikely to allow Toshiba to collapse, given its large workforce and its importance to the nuclear industry, said Amir Anvarzadeh, an analyst at BGC Partners.
But with its nuclear problems, “the question is whether the rest of the business will be big enough to service its debt,” he said.