Toshiba Rated As "Junk" After $8b Loss Announcement

Written by David Richards     05/02/2016 | 07:18 | Category: INDUSTRY

Toshiba, who is now rated at Junk status and whose PC business is struggling in Australia, after being exposed to the collapse of Dick Smith, is set to report an $8-Billion-dollar loss, the worst in the Japanese Companies 140-year history.

Toshiba Rated As "Junk" After $8b Loss Announcement
For the full fiscal year ending in March, Toshiba whose PC business is up for sale, has predicted it would record a net loss of ?710 billion (A$8.57 billion), larger than its previous ?550 billion net-loss forecast in December.

For the previous 12-month period, the electronics conglomerate posted a ?37.8 billion net loss.

After an accounting scandal at Toshiba exposed the company's fragile business portfolio last year, Chief Executive Masashi Muromachi began to implement across-the-board shake-ups, including cutting thousands of jobs and spinning off noncore businesses, one of them being the PC Division. 

The only problem is that the PC industry is facing a slump and no Company is interested in buying the Toshiba PC business that is in decline in Australia. 

Also up for sale is the Companies home appliance businesses, as well as its profitable medical arm.

The disappointing figures follow Toshiba's announcement last month it was inflating tenfold a damages claim against a group of former executives in the wake of its accounting scandal.

The company has also said it was now seeking around $27 million from five former top managers, including a trio of presidents, for their role in the accounting fraud that was exposed last year. 

Japan's market watchdog last month slapped the firm with a record $60 million fine over the affair, which saw the company inflate profits by about $1.2 billion since the 2008 global financial crisis.

A company-hired panel found top executives had pressured underlings systematically to pump up profit figures to hide poor results.

The scandal ushered in a wide-ranging restructuring, which included thousands of job cuts. The company has about 200,000 employees globally.

"Toshiba Group has decided to execute bold structural reforms of its unprofitable businesses, and accordingly executed sales of fixed assets and other measures," it said overnight.

"For this reason, substantial losses were recorded" in the latest period, it added, citing restructuring costs.

The company pledged to press on with the overhaul.

The accounting scandal was one of the most damaging to hit Japan in recent years. The case forced an incumbent president and seven other top executives to resign last year and hammered the company's share price.

Toshiba is facing lawsuits from investors, while Moody's and Standard & Poor's downgraded its credit rating to junk after the scandal.