Toshiba Corp
(6502.T)
has unexpectedly delayed the release of its quarterly earnings and details of a
multi-billion dollar writedown to its nuclear business, sending its
shares sharply lower as investors fret over the conglomerate's future.
shares sharply lower as investors fret over the conglomerate's future.
Toshiba had
said it would reveal the charge at noon, along with its latest outlook. But it
later said in emailed statement that it was "not ready", giving no
further details.
Kyodo news
agency, citing a financial source, said the delay was due to problems in
Toshiba's discussions with auditors.
"The
delay shows that the company is in a mess," said Makoto Kikuchi, chief
executive of Myojo Asset Management.
"We can
assume that the company is not delaying its earnings release for good news. The
market speculates that Toshiba will be releasing figures worse than what is
being reported already."
Toshiba
shares, already down on the day, fell more than 9 percent to 226.2 yen in early
afternoon trading.
The cost of
insuring against a Toshiba credit default climbed, with the most actively
traded credit default swaps TOSB5YJPAC=MG jumping 30 basis points to 357/399
bps. That means it would cost $357,000 to $399,000 per year for five years to
insure $10 million in bonds.
Toshiba has
not given a fresh timing for its release. Beyond Tuesday, it would have to seek
an earnings deadline extension from regulators. It could under securities laws
rules be placed under supervision for possible delisting.
The company
twice delayed planned earnings releases in 2015 as it wrestled with the fallout
from its $1.3 billion accounting scandal.
A
spokeswoman for the company said it may also push back a planned 1600 (0700GMT)
press conference where Chief Executive Satoshi Tsunakawa was expected to
outline the prospects for Toshiba's nuclear arm and update on efforts to raise
capital, including the sale of a stake in its memory chip business in Tokyo.
Toshiba
warned of a potential writedown in December. Sources familiar with the matter
say the charge will be as high as 700 billion yen ($6.2 billion) - a sum that
would wipe out the group's shareholder equity.
Japan's
Nikkei business daily reported on Tuesday that the TVs-to-construction
conglomerate would warn alongside its quarterly earnings that its future is
unclear.
Toshiba may
also sell an interest in British nuclear venture NuGeneration Ltd to Korea
Electric Power Corp (Kepco) (015760.KS), the newspaper said. Reuters reported
earlier this month that Toshiba was seeking at least a partial exit from the
venture.
Asked about
the Nikkei report, a Toshiba spokesman earlier declined to comment. A Kepco
spokesman declined to comment, as "Toshiba's nuclear business plan has not
been crystallized yet."
*REUTERS*
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