Faced with the prospect of a multi-billion-dollar writedown that could wipe out its shareholders' equity, Japan's Toshiba is running out of fixes: it is burning cash, cannot issue shares and has few easy assets left to sell.
The Tokyo-based conglomerate, which is still recovering from a $1.3 billion accounting scandal in 2015, dismayed investors and lenders again this week by announcing that cost overruns at a U.S. nuclear business bought only last year meant it could now face a crippling charge against profit.
Toshiba says it will be weeks before it can give a final number, but a writedown of the scale expected — as much as ¥500 billion ($4.3 billion), according to one source close to Toshiba — would leave the group scrambling to plug the financial hole and keep up hefty investments in the competitive memory chip industry, which generates the bulk of its operating profit.