Toshiba Books $6.3 Billion Writedown, Chairman to Resign

Toshiba says it expects to book a 712.5 billion yen ($6.3 billion) writedown in its nuclear power business, citing cost overruns at a U.S. unit and diminishing prospects for its atomic-energy operations. According to Bloomberg, Shigenori Shiga will step down as chairman of the conglomerate.

The charge will result in a provisional 500 billion yen loss for the nine months through Dec. 31, the company said in a statement. In December, Toshiba had warned the writedown could reach several billion dollars, triggering a share decline that has erased more than $7 billion in market value. As a result of the losses, shareholder equity will drop to negative 150 billion yen for the current year ending in March, Toshiba forecast.

The earnings results came after a chaotic afternoon, which began when the company missed its own deadline for announcing earnings. That raised questions over whether the Japanese company has control over its finances, and the shares fell to near 38-week lows. Toshiba is now under pressure to come up with a plan for shoring up its balance sheet, which was already under strain from a profit-padding scandal in 2015 that led to restructuring, record losses and asset sales.

In a sign of how bad things are, Toshiba said it is considering selling a majority stake in its memory chip business. The company has previously planned to limit the sale to 20 percent to maintain control. Toshiba has said it will separate the chip unit by the end of March and hold a shareholders’ meeting that month. Strategic investors and foreign private equity funds are among the potential bidders, according to people with knowledge of the matter.

For the full fiscal year ending March 31, Toshiba forecast a net loss of 390 billion yen, reversing its November outlook for a 145 billion yen profit. That compares with a projected loss of 262.7 billion yen, the average of analysts’ projections compiled by Bloomberg.