To Understand Toshiba's $6B Nuclear Loss, Go South

Bloomberg looks at what's behind company's financial woes
By Newser Editors and Wire Services
Posted Feb 14, 2017 8:18 AM CST
To Understand Toshiba's $6B Nuclear Loss, Go South
In this Jan. 30, 2017, photo, a man walks past an advertisement of Toshiba Corp.'s products in Tokyo. Japanese electronics and energy giant Toshiba delayed reporting its financial results by a month Tuesday, Feb. 14, 2017, citing problems with its auditing. Toshiba stock tumbled 8 percent in Tokyo trading...   (Koji Sasahara)

The chairman of Japanese electronics and energy giant Toshiba resigned Tuesday after the company logged such massive losses—a projected $6.3 billion—in its nuclear business that it must sell its lucrative computer-chip business to avoid going belly-up. Well, maybe $6.3 billion. Reuters reports that a day of "delays and confusion" preceded the announcement, with the company missing its scheduled earnings release due to unpreparedness and a lack of certainty around its US nuclear unit, Westinghouse. The numbers that were ultimately released are unaudited and may change "by a wide margin," the AP reports. In the meantime, Chairman Shigenori Shiga will step down from the board but stay on as an exec. He is quitting over huge losses from the acquisition of CB&I Stone & Webster by Westinghouse.

Toshiba said its net worth was in the negative, at minus $1.7 billion at the end of last year, but the company hopes to fix that by the end of March. President Satoshi Tsunakawa said the company also was looking for potential partners to acquire a stake in Westinghouse. As for what has gone so wrong since Toshiba bought Westinghouse for $5.4 billion in 2006, Bloomberg reports you have to travel to the "swamp country of Louisiana." Its deep dive looks at the starring role the Baton Rouge-based Shaw Group has played in "the complex tale of blown deadlines and budgets at four nuclear reactor projects in Georgia and South Carolina" being run by Westinghouse. Shaw was hired to handle the construction, though it didn't have a nuclear background. In the case of the South Carolina locations, things are three years behind schedule, though 25 million man-hours have gone into them. More here. (Read more Toshiba stories.)

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