Faced with the prospect of a multi-billion-dollar writedown that could wipe out its shareholders' equity, Japan's Toshiba is running out of fixes: it is burning cash, cannot issue shares and has few easy assets left to sell.
The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, dismayed investors and lenders again this week by announcing that cost overruns at a U.S. nuclear business bought only last year meant it could now face a crippling charge against profit.
Toshiba says it will be weeks before it can give a final number, but a writedown of the scale expected — as much as ¥500 billion ($4.3 billion), according to one source close to Toshiba — would leave the group scrambling to plug the financial hole and keep up hefty investments in the competitive memory chip industry, which generates the bulk of its operating profit.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.