Toshiba books loss on its US nuclear operations

Toshiba Corp's stock crashed by 12 per cent, its biggest decline since May 2015, after it said that it may book a goodwill impairment loss of several hundreds of billion yen on its US nuclear operations.

Toshiba did give a figure to the potential loss, but local media yesterday reported that the loss may range from ¥100 billion to ¥500 billion ($850 million to $4.3 billion).

The loss is related to a dispute over the value of its acquisition of Chicago Bridge & Iron (CB&I) subsidiary CB&I Stone & Webster Inc that Toshiba's Westinghouse Electric unit purchased in December 2015 for $229 million including all liabilities associated with project overruns.

The two companies disagree on the calculations for working capital and who should shoulder potential liabilities related to cost overruns at two delayed US nuclear power plant projects, with CB&I suing Westinghouse after Westinghouse said it was owed more than $2 billion, according to a Reuters report.

This potential loss comes eight months after Toshiba announced a $2.3-billion impairment loss in its fiscal 2015-16 balance sheet of its nuclear business. (See: Toshiba takes $2.3-bn hit from Westinghouse write-down) Toshiba, once a symbol of corporate Japan, has been besieged by problems, especially after its acquisition of Westinghouse Electric.

Of late, Toshiba has been accused of profit-padding in which company top brass have for years systematically pushed their subordinates to cover-up weak financial figures, which led to the  resignations of three presidents, record losses, job cuts and business sell off.