Toshiba Stock Knocked from Top-tier Listing as Financial Woes Deepen

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Toshiba has missed its top-tier listing on the Tokyo Stock Exchange after it announced that growing losses from its nuclear business now sink the value of the company.

The Japanese conglomerate behind the UK’s biggest planned nuclear plant said the losses from major nuclear cost overruns in the US are expected to be larger than first thought, drawing negative shareholder equity deeper to $5.2bn as of the end of March.

In its latest report, Toshiba made an upward change to its sales compared to its estimates in May but also increased its net loss. Sales for the last financial year are now set to be 0.8pc higher at ¥‎4.87tn ($43.8bn), and the net loss is inclined to be 0.9pc bigger, at ¥‎995.2bn, compared to the May’s forecast.

The company, which produces everything from flash memory drives to laptops and semiconductors, is yet to show the full brunt of its financial distress after delaying its full-year financial statement for the sixth time. But the discouraging outlook is enough to trigger an automatic demotion to the next rung of the Tokyo Stock Exchange.

The move was not surprising after the Tokyo bourse put the group on its watch list in mid-March because it failed to tackle matters arising from an accounting scandal in 2015. If Toshiba is not able to dig itself out of negative equity by the end of this financial year, it could be withdrawn from the exchange completely.

Toshiba said in April that it was weighing selling some or all of the Moorside development company NuGeneration to keep itself afloat. It is now the only group backing NuGen, which presently owns 100pc of the Moorside site, after purchasing 40pc back from France’s Engie for $138.5m (£111m).

Toshiba is hopeful that it can overcome its financial woes by selling off its highly prized microchip business after hitting a consortium backed by the Japanese government as its favored bidder earlier this week.

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