Toshiba shares dropped Tuesday morning as a report said the huge conglomerate may warn that its future is in jeopardy owing to huge losses in its nuclear power business.
Japan’s leading Nikkei business daily said Toshiba would issue the red flag as it reports nine-month earnings later in the day.
Shares in the beleaguered company, which was already wrestling with an embarrassing accounting scandal, dropped over four percent in morning trading.
The stock is down about 45 percent since late December when the company flagged the losses.
Toshiba, which declined to comment on the Nikkei report, is to publish its earnings around noon local time (0300 GMT). Company executives will hold a press briefing later in the day.
Earlier reports said Toshiba – one of Japan’s best-known firms and a cornerstone of its post-war industrial rise — was likely to log a net loss of more than $4.0 billion in the April-December period.
The shortfall is linked to losses reportedly topping $6.0 billion at Toshiba’s troubled US nuclear business, once thought to be a growth driver after the 2011 Fukushima crisis slammed the brakes on new atomic projects in Japan.
The reported atomic power loss is related to problems with the value placed on a deal involving the purchase of a nuclear firm by Toshiba subsidiary Westinghouse Electric.
The Nikkei report said Toshiba’s mounting losses would force the company to warn investors over its ability to continue as a going concern in its current form.
It would be the first such warning by the group since its birth from a 1939 merger, according to the Nikkei.
Some other reports have said Toshiba chairman Shigenori Shiga and Danny Roderick, a Toshiba executive and the former head of Westinghouse Electric, are expected to step down.
In April-December 2015, Toshiba reported a 479 billion yen ($4.2 billion) net loss due largely to an embarrassing profit-padding scandal, in which bosses for years systematically pushed subordinates to cover up weak financial results.
The engineering conglomerate, which makes everything from trains to memory chips, is undergoing a major restructuring after the accounting scandal and the losses in its nuclear business.
Earlier news reports said it would dramatically reduce its nuclear operations and stop building new atomic power plants while continuing designing and making nuclear reactors and other components.
The company has already sold its medical devices unit to Canon and most of its appliance business to China’s Midea Group.
It is also moving to spin off its memory chip business to repair its battered balance sheet.
Join GhanaStar.com to receive daily email alerts of breaking news in Ghana. GhanaStar.com is your source for all Ghana News. Get the latest Ghana news, breaking news, sports, politics, entertainment and more about Ghana, Africa and beyond.