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Toshiba withdraws from nuke construction abroad

January 28, 2017

Toshiba pulling out of overseas nuclear reactor construction




Toshiba Corp. has decided to withdraw from the business of constructing nuclear reactors overseas after forecasting a huge deficit for its U.S. subsidiary in the business year ending in March.

The Tokyo-based electronics appliance maker said Jan. 27 the decision was taken to prevent business deficits from rising sharply again in the future.

“We focused on the nuclear business among all of our energy businesses, but this will change," Toshiba's president, Satoshi Tsunakawa, said in a news conference on Jan. 27. "This will entail a review of our overseas (nuclear) business.”

Toshiba had failed to grasp huge losses that would result from the purchase of a company that was constructing nuclear reactors by its subsidiary, Westinghouse Electric Corp.

Reflecting on that failure, Toshiba plans to strengthen the supervision of its overseas nuclear business by putting related divisions under the direct control of the president.

In the future, Toshiba plans to concentrate only on designing, manufacturing and supplying nuclear reactors. It will withdraw from the reactor construction business because of the difficulties in forecasting construction costs.

“We will eliminate the risk from the construction business,” Tsunakawa said.

Toshiba has aimed to win orders for 45 or more nuclear reactors overseas by fiscal 2030. However, it now plans to review that goal.

The deficit from the nuclear business in the United States is likely to increase to about 700 billion yen ($6.1 billion) in this business year. Toshiba plans to announce the exact amount on Feb. 14 when it releases its financial statement for the period from April to December 2016.


Toshiba chairman to resign over struggling U.S. nuclear business


TOKYO (Kyodo) -- Toshiba Corp.'s chairman, Shigenori Shiga, plans to resign over its expected massive write-down in the U.S. nuclear business, sources familiar with the matter said Saturday.

Shiga once served as president of Westinghouse Electric Co., its U.S. nuclear unit, which Toshiba has said could face a multibillion-dollar impairment loss with plant project delays leading to cost overruns.

The Japanese industrial conglomerate may announce his resignation on Feb. 14 when it reports its April-December financial results, they said.

Westinghouse Chairman Danny Roderick is also expected to step down while Toshiba President Satoshi Tsunakawa is likely to stay on, they said.

Shiga, Roderick and Tsunakawa took their current posts last June as Toshiba reshuffled its management following an accounting scandal that surfaced in 2015.

The post of Toshiba chairman is expected to remain vacant after Shiga's resignation.

Shiga was the vice president in charge of the power systems business when Westinghouse acquired CB&I Stone & Webster in late 2015, a U.S. nuclear plant construction firm at the heart of the massive write-down problem.

On Friday, Toshiba said it will review the nuclear operations and spin off its chip business to raise funds needed to cover the expected write-down.

Toshiba to spin off flash memory unit to offset US nuke loss




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.

The company said its board approved the plan Friday to sell an unspecified stake in its chip operation to make up for losses from its nuclear operations in the U.S.

Tokyo-based Toshiba is one of the major Japanese industrial conglomerates whose nuclear sectors have struggled since the 2011 Fukushima disaster. Last year it also said it could book an impairment loss of "several billion dollars" in its U.S. nuclear business.

The Kyodo News service quoted unnamed sources as saying Toshiba will sell less than a 20 percent stake in its highly profitable chip business to ensure its net worth remains positive.

"We will do whatever it takes, including increasing capital," Toshiba Chief Executive Satoshi Tsunakawa told reporters. "I really feel responsible," he said.

Last month, Toshiba said costs for completing Westinghouse Electric Co.'s purchase of the U.S. company CB&I Stone & Webster, Inc. will "far surpass" original estimates. Tokyo-based Toshiba also is enmeshed in a scandal over disclosures that company officials doctored accounting books for years after setting unrealistic earnings targets.

In March 2016, the company sold its medical unit to Japanese camera maker Canon Inc. for 665.5 billion yen ($5.9 billion) on Thursday. It also has spun off its refrigerator and other "white goods" business, selling it to Chinese home appliance manufacturer Midea Group.




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