Embattled Japanese conglomerate Toshiba Corp said on Monday it now expects to slide to a net loss of nearly $1 billion this business year after calculating taxes related to the sale of its prized chip unit.
Toshiba, which separated out the unit in April as a prelude to a sale, said it was being taxed on the basis of assets and liabilities of the transferred business at the time of the split.
The latest forecasts, however, do not reflect expected gains from the 2 trillion yen ($17.6 billion) sale as the deal has yet to receive regulatory approval.
Toshiba said that due to the tax impact, it expects a loss of 110 billion yen ($970 million) in the year to March, instead of its previously forecast profit of 230 billion yen.
It kept its annual revenue and other profit forecasts unchanged.
Toshiba, desperate for funds to cover liabilities arising from it U.S. nuclear unit Westinghouse, agreed last month to sell the unit – the world’s second biggest producer of NAND flash memory chips – to a group led by Bain Capital.
A highly contentious auction meant that a decision on the buyer took much longer than expected, and Toshiba has run the risk of not getting anti-trust clearance before the end of the financial year in March as regulatory reviews usually take at least six months.
If it doesn’t get the deal done in time, it could end the year in negative net worth for a second year in a row, putting pressure on the Tokyo Stock Exchange to delist it.
Source: Reuters
