Then, just recently, it said that its acquisition in 2015 of a US nuclear power business for $229million would actually cost ‘several billion dollars’.
This latest crisis has caused financial observers to speculate about the company’s liquidity.
The losses from the nuclear acquisition could exceed its shareholder equity and because Toshiba is on a Tokyo stock exchange ‘watch list’, it can’t raise cash from the market. This leaves the company between a rock and a hard place.
One option is to sell some of its ‘crown jewels’ and speculation is focusing on Toshiba’s memory business – its most profitable operation. Rumours suggest that Western Digital could buy 20% of the business for $2.7bn.
While Toshiba has reacted quickly, it hasn’t exactly issued a denial. ‘Toshiba positions its memory business as a focus business’, it said in a statement, ‘and is studying the possibility of splitting it into a separate company. However, at this point, nothing has been decided’.
Interesting times, indeed, for Toshiba executives.
