Toshiba Falls by Daily Limit as Nuclear Unit Faces Writedownby
Writedown related to dispute over value of Westinghouse deal
Southern and Scana nuclear projects years behind schedule
Toshiba Corp. fell by its daily limit after saying Tuesday it may have to write down the value of an acquisition made by U.S. unit Westinghouse Electric by billions of dollars.
The shares fell by 20 percent to 311.6 yen by 9:31 a.m. in Tokyo. The stock dropped 12 percent Tuesday after reports the company may book a loss of as much as 500 billion yen ($4.3 billion). Toshiba issued a statement after the market closed Tuesday saying that while the final writedown was yet to be determined, it would affect earnings.
The loss is related to a dispute over the value of a nuclear construction unit acquired by Westinghouse that was geared toward completing the newest generation of reactors at two U.S. facilities. The projects, overseen by utilities Southern Co. and Scana Corp., are years behind schedule and billions of dollars over budget.
Toshiba didn’t elaborate further in Tuesday’s statement to the Tokyo Stock Exchange, other than to say that the writedown would exceed an initially anticipated amount of $87 million, and would probably be in the billions. The increase in charges is related to project costs incurred by CB&I Stone & Webster, a nuclear construction and services company that was acquired by Westinghouse in January.