Westinghouse Electric Company's Japanese parent corporation Toshiba said Tuesday that it would write down the value of its U.S.-based nuclear power giant by $2.3 billion, which left it with a preliminary operating loss of $6.2 billion in the fiscal year that concluded at the end of March.
Toshiba's core business has always been as an electronics and computer company, but it is now one of Japan's largest corporations. It purchased Westinghouse Electric in 2006 for $5.4 billion from BNFL (British Nuclear Fuels Limited). It currently owns 87 percent of the company, while Kazatomprom of Kazakhstan owns 10 percent and IHI Corporation of Japan owns 3 percent.
The operating losses were greater than expected. The forecast had called for a loss of about $4 billion. Analysts, according to Bloomberg, now consider the company under-capitalized, which is one reason the company agreed to sell its medical devices division to Canon Inc earlier this month. It is also selling its home-appliance business to Midea Group Co., of China, and may sell its personal computer businesses, as well.
Toshiba is attempting to gain back investor confidence after $1.3 billion accounting scandal that involved years of attempts by executives to under-report losses. Toshiba shares are now worth less than half their value compared to before the accounting scandal became public.
Much of the trouble as Westinghouse is clearly the aftermath of the March 2011 disaster at the Fukushima Daiichi nuclear generating station, which prompted a global slowdown in orders for new nuclear power plants or plant expansions. At a recent press conference, however, Toshiba Chief Executive Officer Masashi Muromachi said the nuclear power business was operating “as planned.”
Fresh AP1000 orders from China and India over the next 15 years will put Westinghouse back on track, Toshiba said Tuesday.