Toshiba takes $2.3 billion writedown on U.S. nuclear unit Westinghouse

Japan’s Toshiba Corp (6502.T) said on Tuesday that it booked an impairment charge of $2.3 billion for the past financial year on U.S. nuclear unit Westinghouse, a much-anticipated move to address lingering doubts over its book-keeping.

The 260 billion yen writedown is a reversal of Toshiba’s long-time refusal to mark down the 330 billion yen goodwill value of Westinghouse despite a deterioration in the nuclear business since the 2011 Fukushima disaster. Toshiba bought Westinghouse in 2006 for $5.4 billion.

Investors have said that concerns over the value of the business have been a major reason behind the lack of recovery in Toshiba’s share price following a $1.3 billion accounting scandal last year.

The laptops-to-nuclear conglomerate said the reversal was prompted by its weaker financing abilities for nuclear projects after the scandal led to a business overhaul and a slew of credit-rating downgrades.

Toshiba, however, raised its earnings estimates for the year ended in March as it booked a pretax profit of 590 billion yen from the sale of a medical equipment division to Canon Inc (7751.T) using an unusual method to get cash before the deal gained regulatory approval..

It now forecasts a net loss of 470 billion yen, smaller than a 710 billion yen loss estimated earlier. The company is expected to release its results in early May.

Toshiba is also in final talks to replace in June Chief Executive Masashi Muromachi, who took over the company last July after his predecessor and a slew of other top executives resigned for their roles in the scandal.

A source told Reuters that Senior Executive Vice President Satoshi Tsunakawa was a leading candidate, noting that he was not embroiled in the scandal.

Tsunakawa is credited for having increased earnings at the medical equipment unit.

Source: Reuters