Toshiba chairman steps down over $6.3B nuclear business loss; bankruptcy looms

Toshiba said Tuesday its Chairman Shegenori Shiga was stepping down from his post as the company warned it was set to book multibillion-dollar losses in its United States nuclear business.

Toshiba, which was hammered in 2015 by a profit-padding scandal, said it has requested a one-month extension for submitting earnings to market regulators. The company now says the report will be released by March 14.

The delay sent shares in the Japanese conglomerate down by 8% in Tokyo, and added to speculation that its financial woes could become an existential crisis. Now, Toshiba is looking to sell its stake in the company to Korea Electric Power, though it noted it would still be interested in selling the AP1000 reactors if conditions were right.

At the time of the purchase, Toshiba had expected an increase in nuclear exports to emerging countries due to increased demand for nuclear power.

Unite’s national officer Kevin Coyne said: “Toshiba’s announcement today that there will be yet another month’s delay on providing clarity over its future involvement in the Moorside project piles further agony upon this Cumbrian community”.

Toshiba had reportedly been thought to favor selling the stake in its chip business to a private equity firm such as USA -based Bain Capital, which also reportedly submitted a bid.

The company’s US subsidiary Westinghouse acquired nuclear construction business CB&I Stone and Webster in late 2015.

In a stunning acknowledgement, Tsunakawa told reporters the company viewed its move into the nuclear sector by acquiring Westinghouse in 2006 as a misstep that led to its present woes. Toshiba has said it will separate the chip unit by the end of March and hold a shareholders’ meeting that month. The possible sale of a majority of its most valuable unit – the bit that makes flash-memory chips – is new, and reveals the depth of its crisis.

Auditors questioned Toshiba’s latest reporting on the acquisition of CB&I Stone & Webster after a whistleblower, an employee at Westinghouse, wrote a letter to the Westinghouse president.

“That is why we are calling on the British Government to commit the investment that is lost by Toshiba pulling out and for the British and Japanese governments to work together on a broader solution so that post Brexit, West Cumbria jobs, skills and nuclear futures are guaranteed”.

Westinghouse has built 91 reactors around the world, of which 67 are still operating, 12 are closed and four are in long-term outage.