Toshiba shares slide as crisis deepens, fate of Westinghouse unclear
Published: 2017-03-15 11:50:24.0 BdST Updated: 2017-03-15 11:50:24.0 BdST
Shares in Toshiba Corp tumbled on Wednesday after it said it would consider a sale of Westinghouse but did not offer any clarity on whether it would proceed with a Chapter 11 filing for the US nuclear unit - a move that could stem losses.
Toshiba's failure to submit audited third-quarter earnings on Tuesday and its announcement of an expanded probe into Westinghouse also contributed to broad disappointment as did the Tokyo Stock Exchange's placing of the stock on its supervision list.
While the bourse's move was an automatic one that follows Toshiba's failure to clear up concerns about its internal controls a year and a half after a 2015 accounting scandal, it increases the risk of a delisting.
Market participants said the bourse's action meant that the shares were now "untouchable" for institutional investors who cannot invest due to compliance reasons.
Toshiba would be delisted if the bourse is not satisfied with a report on internal controls that Toshiba submitted on Wednesday. The report, required since the 2015 accounting scandal, must also address internal control lapses since then.
"Crucial details about Westinghouse won't be there. Toshiba is already in trouble for delaying the filing of its quarterly earnings twice, and without the complete report, the exchange is unlikely to find its report satisfactory," said Fumio Matsumoto, a senior fund manager at Dalton Capital Japan.
Chief Executive Satoshi Tsunakawa sidestepped questions about a potential Chapter 11 filing for Westinghouse on Tuesday, saying only there were various options. Sources have said bankruptcy lawyers have been hired as an exploratory step.
Shares in the TVs-to-construction conglomerate slid 7.5 percent in early trade. They have plunged by more than half since December, slashing the company's market value to $7.4 billion.
Masayuki Doshida, senior market analyst at Rakuten Securities, said too much uncertainty surrounded the firm.
"For how much can it sell the chip business? When will it release its earnings? Will it remain listed? And can it sell Westinghouse? We are just getting more questions," he said.
Toshiba will meet with creditor banks later on Wednesday to explain the situation, sources familiar with the matter said.
Any unauthorised use or reproduction of bdnews24.com content for commercial purposes is strictly prohibited and constitutes copyright infringement liable to legal action.
- Supreme Court to hear appeal of tannery relocation fine on Mar 30
- FBCCI election: Appeal hearing against court stay on Thursday
- Stocks stumble on US policy woes; Trumpflation trades suffer
- OPEC, non-OPEC oil producers meet in Kuwait over output-cut compliance
- Bull market not dead as tax reform takes spotlight
- FBCCI president challenges HC order halting elections
- Trump tantrum looms on Wall Street if healthcare effort stalls
- High Court halts FBCCI elections for two months
- Asian stocks drop as fresh Trump jitters jolt risk sentiment
- Asian shares at 21-month high, dollar soft on less hawkish Fed
- Four suspects dead inside Sylhet's terror den, army to continue operation
- Army releases videos of assault on Sylhet militant hideout
- Sex in Thai city frustrates junta
- Indian visa rules for Bangladeshis relaxed further
- Burst of gunfire heard as Sylhet militant hideout siege enters fourth day
- Two killed, more ‘well-trained’ militants inside, says army in Sylhet anti-terror operation
- Indian borderguards step up vigil on Sylhet's border with Northeast India
- Shibbari siege must end sooner to deny militants a psychological victory
- Police believe man killed in blast near airport is 'missing' Mirpur youth Ayad
- Commandos rescue trapped residents from Sylhet 'militant den'