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Business

Toshiba unit to file for bankruptcy?

Shares in Japanese conglomerate Toshiba have fallen sharply on the Tokyo Stock Exchange. The renewed steep drop came after a report saying the firm's US nuclear unit could be placed into bankruptcy protection.

Toshiba's Tokyo-listed stock opened higher at the beginning of trading on Monday, but quickly reversed course to end the morning 5.65 percent down on a report in the "Nikkei" business daily that the company's loss-hit US nuclear unit might file for bankruptcy.

The report said Westinghouse Electric could file for Chapter 11 as early as Tuesday, while the troubled unit was eying Korea Electric Power to help with a subsequent restructuring.

Toshiba's market capitalization has halved since late December when the pillar of corporate Japan first warned of multi-billion-dollar losses at Westinghouse, saying it was investigating claims of accounting fraud by senior executives at the division.

Dim outlook

"There will likely be more selling, if US authorities criticize the bankruptcy restructuring," IwaiCosmo Securities broker Toshokazu Horiuchi said in a statement.

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Trouble at Toshiba

Japanese regulators have given Toshiba until April 11 to publish results for the October-December period which were originally due in mid-February.

The company delayed the release, saying it needed more time to probe claims of misconduct by senior managers at Westinghouse and gauge the impact on its finances.

Toshiba has previously warned it is on track to report a net loss of almost $3.5 billion (3.2 billion euros) in the fiscal year to March, as it faces a huge write-down at Westinghouse.

Earlier this month, ratings agency Standard & Poor's cut the firm's credit rating again, warning its finances were quickly deteriorating.

hg/jd (AFP, dpa)

 

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