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UPDATE1: Toshiba could incur 700 bil. yen loss, asks state-owned bank for aid

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01/19/2017 | 03:23am CET

value="Tokyo:6502" idsrc="xmltag.org">Toshiba Corp. has sought financial assistance from the state-owned value="ACORN:2004431574" idsrc="xmltag.org">Development Bank of Japan as it expects an asset impairment loss of up to 700 billion yen ($6.17 billion) from its value="LC/us" idsrc="xmltag.org">U.S. nuclear business, sources close to the matter said Thursday.

With the huge expected loss, Toshiba is facing the risk of falling into a capital deficit, the sources said, adding the company will also seek to secure funds by selling operations and assets.

Toshiba had estimated at the end of 2016 that it could book a loss of up to 500 billion yen but the yen's recent fall against the value="LC/us" idsrc="xmltag.org">U.S. dollar has apparently inflated the amount as the value="LC/us" idsrc="xmltag.org">U.S. nuclear operations are denominated in foreign currency. Costs related to the nuclear reactors the company is trying to complete have also likely swollen.

While the electronics-to-nuclear conglomerate has estimated a net profit for fiscal 2016 ending in March, ballooning losses could lead Toshiba to post huge deficits and the company's finances could fall into a critical situation.

Toshiba hopes to receive support from its main creditor banks and the DBJ through such means as issuance of preferred shares, the sources said.

Toshiba has been focusing on nuclear power but it has struggled to secure orders for new plants both at home and abroad, particularly since the 2011 Fukushima nuclear disaster. The company said last month it was facing a multibillion-dollar write-down at its value="LC/us" idsrc="xmltag.org">U.S. nuclear unit value="ACORN:2129156168" idsrc="xmltag.org">Westinghouse Electric Co.

Toshiba also said Wednesday it is considering spinning off its mainstay flash memory business, in an apparent move to generate cash through the sale of a stake in the new entity to offset losses in its value="LC/us" idsrc="xmltag.org">U.S. nuclear business.

== value="ACORN:2831757568" idsrc="xmltag.org">Kyodo

© Kyodo News International, Inc., source Newswire

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