Toshiba chairman Shigenori Shiga has resigned taking moral responsibilty of the multi-billion dollar loss

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    The logo of Toshiba is seen in Kawasaki near Tokyo, Friday, Jan. 27, 2017. Toshiba Corp. says it will split its lucrative flash memory business to make up for losses from its troubled U.S. nuclear business and is looking for a third-party capital injection. (AP Photo/Koji Sasahara)

    Earlier Toshiba had deferred issuing its results, but the reason given at that time was the company was set to report a net loss of 390bn yen ($3.4bn) in the year to March 2017. The company said it awaited to take a 712.5 billion yen ($6.3bn, £5bn) write off at its US nuclear business.

     

    The situation has forced some analysts to believe that the company’s future is at risk. Mr Shiga resigned “to take management responsibility for the loss”, the firm said. Shares of the company has slithered by as much as 9% on Tuesday and have lost about 50% since late December, when for the first time warning was raised about the magnitude of the problems.

    Chip deal

    Reason for the losses are connected to a deal done by its US subsidiary, Westinghouse Electric, when it acquired a nuclear construction & services business from Chicago Bridge and Iron in 2015. Assets that it took on are likely to be worth less than initially thought and there is also a discord about payments that are due.

    It has already announced plans to sell off part of its profitable memory chip business to raise funds. It is the second largest chip maker in the world, with Samsung being the leader.The company hasn’t yet recovered after it transpired in 2015 that profits had been exaggerated for seven years, prompting the CEO to resign.

    UK plant in state of uncertainty 

    NuGen Moorside Project

    Toshiba has a 60% stake in NuGen, a joint venture with France’s Engie, which has the contract to build a new nuclear power plant in Cumbria in the UK. It is evaluated that the Moorside plant will eventually furnish as much as 7% of the UK’s energy needs.

    In a statement, NuGen said: “NuGen affirmed the announcement that Toshiba’s review into the future of its nuclear power business outside Japan is complete and that it is wholeheartedly committed to developing NuGen’s Moorside Project.”

    Business and Energy Secretary Greg Clark said: “I welcome the continued commitment of the NuGen consortium to the Moorside project. The UK Government is devoted to new nuclear as an essential ingredient of our energy mix.”

    Tom Greatrex, chief executive of the UK Nuclear Industry Association, said: “Building new nuclear capacity in west Cumbria is an integral part of the UK being able to substitute old power stations, keeping a balanced mix as carbon emissions are scaled down. This is a crucial part of our country’s energy future.”

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