Toshiba Corp. shares were demoted Tuesday to the Tokyo Stock Exchange's second section after the company's liabilities exceeded its assets in the year ended in March.

Toshiba failed to meet the bourse's listing standards because the conglomerate incurred a negative net worth due to huge losses from its U.S. nuclear business. Its shares will be delisted automatically unless it eliminates its negative net worth by next March.

The company is likely to face an uphill battle to remain listed, given delays to its plan to overcome its negative balance sheet by selling the company's profitable semiconductor unit.