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Toshiba-Nuclear-Feature

We've known for weeks that Toshiba was in rough shape and seeking to raise additional revenue through a potential partial sale to Western Digital, but events on Tuesday pushed the visitor'due south position from "really bad" to "implosion imminent."

Today, Toshiba appear that it would accept a $half dozen.2 billion write-downward on the value of its nuclear plant construction concern. Toshiba acquired a majority stake in Westinghouse Electrical Company in 2006, and later upped its share of the company to 87% in 2022. Toshiba paid $5.4 billion for the company in 2006 and an additional $1.6 billion in 2022. In 2022, Toshiba declared its nuclear business was more profitable now than when the company acquired it, just scandals over the Japanese business firm's bookkeeping broke soon thereafter.

Westinghouse is far from the just nuclear applied science house that Toshiba owns, but information technology's near the heart of this scandal. In 2022, Westinghouse bought an American construction company, CB&I Stone & Webster. Toshiba now says that Westinghouse overpaid for the company and that information textile to the acquisition — specifically price overruns, delays, and the affect both would have on CB&I Stone & Webster's lesser line — were not disclosed properly or accounted for.

AP1000

The AP1000 reactor being installed at Sanmen China.

Toshiba also announced today that information technology would accept a $3.4 billion loss (estimated) due to price overruns at multiple primal nuclear projects, and that it would review all of its agreements with existing ability companies to expand nuclear capability across the earth. Toshiba plans to pivot towards emphasizing existing service contracts as opposed to bidding on nuclear plant construction projects, though it does still hope to sell some of its AP1000 reactors. The AP1000 is a pressurized water reactor, and the latest pattern from Westinghouse has deployments scheduled to come online this year in Sanmen, China. This deployment is running two-3 years late, which may be function of why Toshiba is taking such heavy losses.

In England, Toshiba's announcement that it would withdraw from nuclear construction contracts outside of Nihon hasn't played well. Toshiba owns 60% of the firm NuGen, which was to construct a new generating station at Moorside in Cumbria. Now, Toshiba is looking to sell its stake in the company to Korea Electrical Power, though information technology noted information technology would still exist interested in selling the AP1000 reactors if weather were right.

Fallout

Shigenori Shiga, Toshiba's chairman, has announced he volition footstep down on Wednesday to take responsibility for the company's performance, but that's scarcely going to slow things down. Toshiba has requested another 30 days to prepare its fiscal and quarterly statements for the Tokyo Stock Exchange. Its stock value has fallen by more than 50% since December 14.

Current expectations are that Toshiba will have no choice merely to file for bankruptcy, sell a significant corporeality of assets, and endeavor to survive that manner. Given the fallout of these events, you might exist wondering why Toshiba doesn't simply sell its nuclear business — merely according to TheNew York Times,it'due south had no luck finding a buyer. Last month, the firm announced it would spin off its microchip concern, with an estimated value of $thirteen billion to $17 billion if Toshiba sold its unabridged stake. That would pay off the company'south firsthand debts, but would leave information technology holding the handbag on an incredibly expensive, underwhelming nuclear business with no prospects for virtually-term improvement.