Toshiba's future in doubt as it reveals $5 billion losses

Electronics firm may not survive financial catastrophe

Toshiba's financial woes have today led it to admit "substantial doubt" over its ability to operate as a going concern.

The Japanese manufacturer took the unprecedented step of releasing its much-delayed third quarter financial results without the approval of its auditors, PwC, whose previous refusal to sign off has twice delayed publication of the results.

It is possible that Toshiba will now be delisted from the Tokyo Stock Exchange.

After restructuring its divisions to counteract growing losses, and seeing most of these divisions improve as a result, Toshiba was rocked by losses experienced by its nuclear power subsidiary, Westinghouse Electric, which has filed for bankruptcy.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Toshiba recorded an income loss for the first nine months (April to December 2016) of its latest financial year of 576 billion, or $4.9 billion.

Its liquidity will be hit badly by Westinghouse Electric's bankruptcy, and its losses are such that Toshiba may not be able to renew a Special Construction Building License with Japan's government when it expires in December 2017.

"There are material events and conditions that raise the substantial doubt about the Company's ability to continue as a going concern," Toshiba's financial statement reads.

To combat this, Toshiba is considering selling off a majority stake in Westinghouse Electric, as well as in its memory chip business, which actually saw a 16% return on sales in the nine-month results. The company has also announced that its memory business will be split off into its own company.

Its decision to spin off Toshiba Memory Corporation as a separate company means it can more speedily sell all or some of it, to generate money to pay its debts and rebuild capital. Foxconn is reportedly one potential buyer of the chip business.

A news conference is expected to take place today, a Toshiba spokesperson confirmed.

Featured Resources

The essential guide to cloud-based backup and disaster recovery

Support business continuity by building a holistic emergency plan

Download now

Trends in modern data protection

A comprehensive view of the data protection landscape

Download now

How do vulnerabilities get into software?

90% of security incidents result from exploits against defects in software

Download now

Delivering the future of work - now

The CIO’s guide to building the unified digital workspace for today’s hybrid and multi-cloud strategies.

Download now
Advertisement

Most Popular

Visit/hardware/354232/raspberry-pi-4-owners-complain-of-broken-wi-fi-when-using-hdmi
Hardware

Raspberry Pi 4 owners complain of broken Wi-Fi when using HDMI

29 Nov 2019
Visit/mobile/mobile-phones/354222/samsung-sails-past-apples-market-share-despite-smartphone-market-slump
Mobile Phones

Samsung sails past Apple's market share despite smartphone market slump

28 Nov 2019
Visit/mobile/google-android/354189/samsung-galaxy-a90-5g-review-simply-the-best-value-5g-phone
Google Android

Samsung Galaxy A90 5G review: Simply the best value 5G phone

22 Nov 2019
Visit/business-strategy/digital-transformation/354201/boston-dynamics-dog-like-robots-sniff-out-bombs-for
digital transformation

Boston Dynamics dog-like robots sniff out bombs for Massachusetts police

26 Nov 2019