Toshiba puts UK’s nuclear power plans under threat: Fears that crisis will halt Japanese firm’s investment in British plant. Toshiba owns a 60 per cent stake in the planned £10billion NuGen nuclear power project in Moorside, Cumbria, which aims to supply power for about 6million homes from 2025. But shares plunged at Toshiba for the third day running yesterday after it warned of a multi-billion dollar write-down involving its US nuclear subsidiary. Forty per cent has been wiped off the company’s value since it said on Monday that its US nuclear subsidiary Westinghouse Electric may have overpaid by several billions of dollars for another nuclear construction and services business. Westinghouse UK is providing the reactors for the planned project in Cumbria, the rest of which is owned by French company Engie, and would be one of Europe’s largest nuclear power plants. Moody’s investor service has downgraded Toshiba’s ratings and warned the writedown could affect the company’s ability to pay its debts, little over a year after its finances were seriously hit by an accounting scandal. Justin Bowden, the GMB union’s national secretary for energy, said: ‘It needs to be established as soon as possible whether or not the collapsing Toshiba share price, in particular in relation to its Westinghouse operation, has any implications, and if so what these are for the extremely important Westinghouse project.’
Daily Mail 29th Dec 2016 read more »
Faced with the prospect of a multi-billion-dollar writedown that could wipe out its shareholders’ equity, Japan’s Toshiba (6502.T) is running out of fixes: it is burning cash, cannot issue shares and has few easy assets left to sell. The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, dismayed investors and lenders again this week by announcing that cost overruns at a U.S. nuclear business bought only last year meant it could now face a crippling charge against profit. Toshiba says it will be weeks before it can give a final number, but a write down of the scale expected – as much as 500 billion yen ($4.3 billion), according to one source close to Toshiba – would leave the group scrambling to plug the financial hole and keep up hefty investments in the competitive memory chip industry, which generates the bulk of its operating profit.
Reuters 29th Dec 2016 read more »
Toshiba Corp.’s ambitions to make nuclear power a centerpiece of its future have instead led to an accounting scandal and billions of dollars in potential losses. For clues to what happened, the reactor being built by its Westinghouse Electric Co. division in this seaside town south of Shanghai offers an illuminating Exhibit A. The Sanmen reactor was meant to be the showcase of a new technology that Westinghouse hopes will revolutionize the nuclear industry by making power plants safer, less labor-intensive and quicker to build. Instead, the first so-called AP1000 reactor has been bedeviled by delays. In one instance, a critical component in its cooling system failed, slowing work by more than two years. Meanwhile, Westinghouse struggled for years to complete its design work for the AP1000, adding to delays and angering its Chinese state-owned customer. The reactor is now at least three years behind schedule. Westinghouse said Thursday it aims to load enriched uranium fuel in the reactor early next year, pushing back its previous year-end goal. The troubles in Sanmen mirror those at nuclear projects around the world—including four by Westinghouse in the U.S.—that led to this week’s announcement by Toshiba that it is looking at billions of dollars in potential losses, triggering a massive selloff by investors. Engineers are now pushing to complete final work for the first Sanmen AP1000 reactor to start up by spring. Even if all goes smoothly, the company’s failure to deliver on schedule has undermined its standing.
Wall St Journal 29th Dec 2016 read more »
Analysts were scrambling yesterday to identify what Toshiba could throw overboard to stay afloat in the storm battering the Japanese company. As its shares fell for a third day in a row, dropping 17 per cent to 258.7 yen and slicing away a cumulative 40 per cent chunk of its value this week, and after a second credit ratings agency downgraded it further into junk territory, Toshiba was coming under growing pressure to plug a multibillion-dollar financial hole. “I see little option but to sell a slew of non-core assets,” Kenneth Courtis, the Asia-based managing partner of Courtis Global & Associates, said. That might be easier said than done. Hiroki Shibata, of Standard & Poor’s, said that Toshiba “doesn’t have many saleable assets in hand”. After S&P downgraded Toshiba on Wednesday, Moody’s followed suit yesterday, from a B3 to a Caa1 rating, with Masako Kuwahara, its lead analyst for Toshiba, warning that the group’s “financial metrics will likely deteriorate further, potentially resulting in a negative equity position”.
Times 29th Dec 2016 read more »