February 13, 2017 - 13:55 AMT
Toshiba faces challenges as it preps for nuclear writedown

Toshiba Corp (6502.T) will on Tuesday, February 14 detail a writedown of close to $6 billion after bruising cost overruns at its U.S. nuclear arm, turning investor attention to the Japanese group's efforts to fix that and other balance sheet headaches, Reuters said.

The TVs-to-construction conglomerate warned of a potential multi-billion dollar nuclear writedown in December, a year after a $1.3 billion accounting scandal.

Sources familiar with the matter say the final charge, to be detailed alongside quarterly earnings, will be as high as 700 billion yen ($6.2 billion), a sum which alone would wipe out the company's shareholder equity.

Toshiba, which has seen its market value almost halve since the prospect of a writedown emerged in December, is also expected to outline the prospects for its nuclear arm and update investors on efforts to raise capital, including through the sale of a stake in its flagship memory chips business.

"The question for Toshiba is how is it going to move forward," said Masahiko Ishino, analyst at Tokai Tokyo Research Center.

He added Toshiba would need to show how it could stay competitive in the cash-generating but capital-intensive memory chip industry, given its battered balance sheet.

Toshiba has offered a 19.9 percent of its prize chips business to investment funds and rivals including Bain Capital, SK Hynix (000660.KS) and Micron Technology (MU.O).