Finance

Westinghouse's Losses from Nuclear Business Deal Mount

Westinghouse's Losses from Nuclear Business Deal Mount”

Shares in Toshiba were suspended from trading on Wednesday, after falling 20 percent on reports that its USA nuclear business was worth less than originally thought.

The company's stock plunged 20-percent on Tuesday.

Westinghouse bought the nuclear construction and services business from Chicago Bridge & Iron in 2015.

As a result, the company found that the cost to complete U.S. AP1000 projects would far surpass original estimates, meaning that S&W's asset values are much less than originally believed.

"This will come as an additional shock to Toshiba 's institutional investors that may further undermine confidence in company management, as well as significantly weakening its worldwide nuclear credentials", said Tom O'Sullivan, founder of energy consultancy Mathyos Japan.

On Tuesday, the Tokyo-based conglomerate said in a statement that costs linked to the acquisition previous year by its United States subsidiary of a nuclear service company will possibly come to "several billion USA dollars, resulting in a negative impact on Toshiba's financial results".

Baltimore Ravens (8-6) at Pittsburgh Steelers (9-5)
They're running the ball efficiently. "But we get opportunities to make plays down the field, when we do, we've got to make it". The Steelers have won five in a row since losing at home to the Dallas Cowboys, who beat them one week after the Ravens.

Tsunakawa apologised for "causing concern" and answered in the affirmative when asked if Toshiba is considering boosting capital.

The write-off that Toshiba warned about on Tuesday hinges on the portion of CB&I Stone & Webster's value that accountants call goodwill - essentially, the premium that an acquirer pays over the value of a company's tangible assets, such as factories and equipment.

"Although Toshiba is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position", added Kuwahara, who serves as the lead Moody's analyst for Toshiba. CB&I and Westinghouse are involved in litigation over the calculation of working capital in the deal.

As of the end of September 30, Toshiba had shareholders' equity of 363.2 billion yen ($3.09 billion), or just 7.5 percent of assets, far below the 30 percent required for Japanese electronics makers.

The Nikkei business daily first reported the matter on its website.



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