Toshiba falls after rating cuts as nuclear unit faces writedown
Toshiba Corp. extended declines after the company’s credit rating was cut following an announcement that it may have to write down the value of an acquisition made by U.S. unit Westinghouse Electric by billions of dollars.
The shares fell as much as 18 percent to 260 yen in Tokyo. The stock plunged by the most on record Wednesday after Toshiba issued a statement Tuesday saying that while the final writedown was yet to be determined, it would affect earnings.
The loss is related to a dispute over the value of a nuclear construction unit acquired by Westinghouse that was geared toward completing the newest generation of reactors at two U.S. facilities, which are behind schedule and billions of dollars over budget. Moody’s Investors Service, Rating and Investment Information Inc. and S&P Global Ratings cut Toshiba’s credit rating.
Toshiba didn’t elaborate further in Tuesday’s statement to the Tokyo Stock Exchange, other than to say that the writedown would exceed an initially anticipated amount of $87 million, and would probably be in the billions. The increase in charges is related to project costs incurred by CB&I Stone & Webster, a nuclear construction and services company that was acquired by Westinghouse in January.