Toshiba’s record loss: shares plummet due to nuclear failures

Toshiba Projects Record Loss as Nuclear Unit Files for Bankruptcy, Bloomberg, by Dawn McCarty and Pavel Alpeyev March 29, 2017,

Toshiba warns full year loss may widen to 1.01 trillion yen
Japanese company trying to sell memory chips division
Toshiba Corp. projected its annual loss could more than double to a record 1.01 trillion yen ($9.1 billion) as its U.S. nuclear unit Westinghouse Electricfiled for Chapter 11 bankruptcy.

The collapse of Westinghouse, once the linchpin of Toshiba’s plans to diversify away from consumer electronics, caps a disastrous run for the Japanese conglomerate as project delays crippled earnings from the nuclear plant business. The company has now put its prized memory chip unit up for sale just as it was recovering from a profit-padding scandal that claimed the scalps of senior executives……
Toshiba listed as much as $10 billion debt for Westinghouse and another entity. The nuclear unit filed in U.S. Bankruptcy Court for the Southern District of New York and proposed to appoint Weil, Gotshal & Manges LLP as legal adviser, AlixPartners LLP as financial adviser, and PJT Partners Inc. as investment banker, subject to court approval.
Toshiba said last month it expected to write down 712.5 billion yen in its nuclear-power business, citing cost overruns and diminishing prospects for atomic-energy operations. The company has twice delayed its earnings report, with results for the December quarter now due on April 11.
“There were warning signs when Toshiba delayed releasing financials earlier this year,” said Emmanuel Chua, senior associate at Herbert Smith Freehills in Singapore. “The big question mark is whether the restructuring plan and process presents real opportunities for a turnaround, or whether it is simply an exercise of ‘kicking the can down the road.”’
Shares of Toshiba have slumped 23 percent this year after advancing 13 percent in 2016. The loss forecast was announced after the close of trading on Wednesday.

Expectations that the company may be too big to fail for the Japanese government, and the likelihood that it will get state support is bolstering its bonds. Toshiba’s 20 billion yen of December 2020 bonds were little changed at 88 percent of face value, according to data compiled by Bloomberg……
Scana and Southern could end up facing billions of dollars in additional costs, according to Morgan Stanley. Scana faces as much as $5.2 billion in higher costs that could drag its shares down 5 percent, analysts at the bank including Stephen Byrd said in a March 22 research note, while cost overruns for utility owner Southern could reach $3.3 billion……https://www.bloomberg.com/news/articles/2017-03-29/toshiba-s-u-s-nuclear-unit-westinghouse-files-for-bankruptcy