Toshiba is on the edge after an $8.3 billion writedown

Photo Jose Luis Roca/AFP/Getty Images

Toshiba chairman Shigenori Shiga has resigned as the Japanese conglomerate teeters on the edge of collapse after posting a provisional ¥500 billion ($AU5.7 billion) loss for the nine months to December 31. The figure was ¥100 billion more than reports earlier in the day when the company missed its own deadline for the release of the results yesterday.

Toshiba expects to post a full ¥712.5 billion ($8.2 billion) writedown on its Westinghouse nuclear power business in the US, with the company predicting that figure will send it into negative shareholder equity of ¥150 billion ($AU2.85 billion) when the financial year ends in March.

Here’s how Toshiba sees its various units performing from the investor update released overnight.

Source: Toshiba

When the conglomerate warned in December about the pending writedown of the nuclear business, it wiped off than $US7 billion ($AU10 bn) in market value. Toshina shares fell nearly 10% yesterday when the company delayed the release of its results, but subsequently picked up slightly after the announcement to end 8% down at ¥229.8.

In an attempt to shore up the balance sheet, Toshiba said it’s now looking to sell a majority of its flash memory chip business, rather than the 20% stake it previously planned to offload. Toshiba has interests in everything from nuclear power to railway networks, lifts, PCs and TVs.

The latest writedown adds to the company’s woes as it was trying to recover from a US$1.3 billion accounting scandal in 2015 that falsely boosted profits. It forced Toshiba to undertake a major restructure and sell off assets. The company posted an operating loss for the year of ¥690 billion ($AU7.9 bn).

Toshiba is now forecasting a net loss of ¥390 billion $AU4.5 bn) for the end of the Japanese financial year on March 31. Just three months ago, the company had predicted a ¥145 billion profit.

Toshiba bought the US-based Westinghouse Electric Company, nuclear energy business in 2006 for $US5.4 billion ($AU7.1 bn), but it suffered from rising cost overruns on two key projects. Plants they are building in South Carolina and Georgia are around both three years behind schedule and billions of dollars over budget. There are also delays on plants in China.

Toshiba attempted to sell some of the business but was unable to find buyers.

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