Toshiba's financial crisis has deepened on fears it may book a bigger-than-expected $6 billion writedown on its U.S. nuclear business, sending its shares sliding 15 percent. As Sonia Legg reports, it casts doubt on whether measures the beleaguered conglomerate is expected to take to bolster finances - including the sale of a stake in its chip business - will be sufficient.
It had already warned about a writedown on it nuclear business. But it seems Toshiba may have under-estimated the losses. Media reports suggest the hit could be as much as $6 billion dollars - almost a third more than previously expected. It's also thought to have approached banks for assistance. There's been no confirmation of either. But it was enough to send shares down 26 percent at one point - they closed 15 per cent lower. (SOUNDBITE) (English) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "At the moment investors have very little confidence in the corporate governance of Toshiba. That started with the manipulating of profits and losses with the overall company accounts. Now we find that losses over their Westinghouse nuclear programmes in the U.S. are likely to pretty much wipe out the entire value of that business." Toshiba's selling a stake in its profitable chip business to help address the shortfall. But there are fears it's not doing enough. (SOUNDBITE) (English) MICHAEL HEWSON, MARKET ANALYST, CMC MARKETS, SAYING: "Maybe a change of management is in order because I think what investors need right now is confidence in management of the company to deal with the problems as they are right now." The Japanese conglomerate employs 190,000 people in businesses ranging from robotics and elevators to sewerage plants and batteries. Some reports suggest it's now considering selling other assets. Since the accounting scandal in 2015 it's been on the Tokyo stock exchange watch list, meaning its unable to tap equity markets.