[UPDATED AGAIN]Toshiba reports ¥532BN ($4.8BN or £3.8BN) losses

[Master Disaster]

Update 2

 

 

Bloomberg is now reporting that Toshiba might not get to sell their NAND business to Foxconn as the US Government is likely to oppose the sale of the business to Foxonn due to its close ties to China. If like me you thought Foxconn were Taiwanese you would be correct but they operate and do most of their business in China. According to Bloomberg the Government couldn't actually block the sale but they could stall it by not giving regulatory approval and at this point in time Toshiba cannot afford to hold onto that much potential capital. Remember that Foxconn are offering literally Billions more than anybody else for the business.

 

 

 

 

 

 

Quote

Even with nearly $27 billion on the table, Toshiba is considering rejecting Foxconn because of probable opposition from both the Japanese and U.S. governments, Bloomberg sources said on Wednesday. Though headquartered in Taiwan, Foxconn mostly operates out of China, and resistance to the company's Chinese ties could delay regulatory approvals —something Toshiba can't afford in its current state, as it's facing over $9 billion in losses from its bankrupt U.S. nuclear division, Westinghouse.
 

 

Bloomberg is also reporting that the Japanese government is rallying some businesses to inject some cash into Toshiba in return for a stake in the company in a last ditched effort to save it. Remember that Western Digital have shown opposition to Broadcom buying the business.

 

Quote

Instead Toshiba is seriously considering lower bids, such as an $18 billion offer from another Apple supplier, U.S. chipmaker Broadcom. The Japanese government, meanwhile, is said to be organizing an offer from several local companies which would inject just $4.6 billion, but also claim only a minority stake. That would allow Toshiba to retain control of its successful memory operations while allaying concerns about the Japanese economy or national security.

While preliminary bids have been submitted, nothing is yet binding. The deadline for the next bidding round is mid-May, one source said.

Two Japanese government officials —Chief Cabinet Secretary Yoshihide Suga, and Industry Minister Hiroshige Seko —have confirmed that the government is hoping to protect its interests in any deal.

"As a general principle, there would be a requirement to examine any deal under the foreign exchange law," Suga added.

 

SK Hynix are also supposedly interested in buying the NAND fab from Toshiba.

 

Quote

The other major player for Toshiba's memory business is South Korea's SK Hynix, itself an Apple memory supplier, which has already submitted a bid but is trying to recruit Japanese investors to quell political obstacles.

http://appleinsider.com/articles/17/04/12/toshiba-likely-to-reject-27b-memory-business-bid-by-apple-manufacturer-foxconn
[/spoiler]

 

Update 1

 

It seemed likely that Toshiba were going to spin off their nand manufacturing business and try to sell it separately, reports suggested Foxconn would be the ones to buy. Well now WD have issued a public letter to Toshiba informing them that they have a partnership agreement in place and the selling of the nand business would violate that agreement, the letters goes as far as saying "we (WD) would not sit idly by while Toshiba "runs roughshod" over its rights".

 

 

 

 

 

Quote

Western Digital Corp (WDC.O) has warned Japan's Toshiba Corp (6502.T) that splitting off its chip unit prior to a planned sale of the business violates their joint chip venture contract and that it wanted to enter into exclusive talks.

 

In a strongly worded letter dated April 9, Western Digital which operates a chip plant with Toshiba in Japan, said the split-off is a "very serious breach of joint venture agreements," and it would not sit idly by while Toshiba "runs roughshod" over its rights.

 

The letter, however, did not threaten legal action.

 

WD are now demanding private meetings be scheduled between the 2 to discuss the agreement and the sale of Toshiba's nand business citing concerns over Broadcoms interest.

 

Quote

The California-based company also said the auction process was not in the best interests of Toshiba stakeholders and that it wanted to enter into exclusive talks with the Japanese conglomerate.

 

Rumored bids of between 2 trillion yen to 3 trillion yen ($18 billion to $27 billion) were well above the fair and supportable value of the chip business, it added in the letter which was sent by CEO Stephen Milligan and addressed to Toshiba's board of directors.

 

Western Digital also said that each of the rumored bidders are highly problematic for both Japan and the joint ventures and specifically named Broadcom Ltd (AVGO.O), saying that it had grave concerns based on recent commercial dealings with them.

 

A representative for Broadcom was not immediately available for comment.

 

Broadcom, which has partnered with U.S. private equity firm Silver Lake Partners LP, is among the four bidders that Toshiba is currently considering after narrowing the field of suitors, sources with knowledge of the matter said.

 

The other bidders are Western Digital, South Korea's SK Hynix and Taiwan's Foxconn (2317.TW), they added, declining to be identified as they were not authorized to speak on the matter publicly.

http://www.reuters.com/article/us-toshiba-accounting-chips-idUSKBN17E0OG

 

Original post

 

Things are really not looking good for Toshiba right now. After calling in the auditors last year the companies latest financial report has been delayed 3 times already. 

 

 

Toshiba are now reporting that from the months of April 2016 to December 2016 they made a loss of ¥532BN, $4.8BN or £3.8BN (however its worth mentioning that this figure has not been approved by the firms auditors yet).

 

A spokesman said this figure "raises substantial doubt about the company's ability to continue as a going concern".

 

 

 

 

 

 

Quote

Toshiba has filed its delayed financial results, warning that the company's survival is at risk.

 

"There are material events and conditions that raise substantial doubt about the company's ability to continue as a going concern," the company said in a statement.

 

The electronics-to-construction giant reported a loss of 532bn yen (£3.8bn; $4.8bn) for April to December.

However, the results have not been approved by the firm's auditors.

 

These latest financial results have already been delayed twice and raise the possibility that Toshiba could be delisted from the Tokyo Stock Exchange.

 

The president has expressed dismay as the auditors decision to not approve the financial report but is also hopeful the Japanese stock exchange won't delist the former technology giant.

 

Quote

Toshiba's president, Satoshi Tsunakawa, apologised for the problems facing the firm and called the auditor's decision not to approve the financial report as "truly regrettable".

 

He said he hoped the company would not be delisted.

 

Toshiba's problems started in 2015 when it was reported they had been artificially inflating profits by billions over a 7 year period to try and hide debts and then in 2015 Westinghouse (a division of Toshiba) filed for bankruptcy adding more pressure to the company.

 

Quote

Toshiba, originally known for its consumer electronics products, has faced a series of difficulties.

 

An accounting scandal, uncovered in 2015, led to the resignation of several members of the firm's senior management, including the chief executive, after the company was found to have inflated the previous seven years' profits by $1.2bn.

 

Its problems came to a head again in January this year, when it became clear its US nuclear unit, Westinghouse, was in financial trouble.

 

Westinghouse was put into Chapter 11 bankruptcy in March, which protects it from creditors while it undergoes restructuring.

 

Taiwanese giants Foxconn are reportedly ready to buy Toshiba for a figure of up to $27BN or £21BN.

 

Quote

This week, Taiwanese electronics manufacturer Foxconn was reported to be willing to pay up to $27bn (£21.7bn) for Toshiba's computer chip business, a move which could help shore up the losses if it went ahead.

 

But that has not been enough to resolve Toshiba's difficulties.

 

The firm's auditors, PriceWaterhouseCooper Aarata, have refused to sign off the company's accounts, resulting in their publication being delayed twice.

 

Now, faced with a deadline, Toshiba has made the unprecedented move of publishing the results without the auditor's approval.

http://www.bbc.co.uk/news/business-39564956
 

 

Just shows that no matter how big you are things can always go south.

 

Anybody who understands business affairs willing to clarify this situation about the auditors not approving the financial report. What exactly does that mean and why would Toshiba publish a financial report without the go ahead from the people who have been brought in to save them?

[Energycore]

Wow that sucks for Toshiba. I wonder what will be of OCZ's SSDs which were for the most part pretty good, if (when) Toshiba sinks I'll be praying that the cool technologies they helped push into the industry don't go with them

 

And espeically so because I own a Toshiba SSD lol. I never felt that their products were below par, but the fact that they lied in their financial statements speaks of a poorly managed company.

Best of luck especially to the employees because being laid off suuuuuuuuuuucks

[sazrocks]

How do you even get to the point of losing 4.8 BILLION dollars per year? Or do I just not understand how businesses like this work?

[Master Disaster]

1 minute ago, sazrocks said:

How do you even get to the point of losing 4.8 BILLION dollars per year? Or do I just not understand how businesses like this work?

Not ever per year, that's only over a 9 month period. It would be closer to $6.5BN per year.

[sazrocks]

2 minutes ago, Master Disaster said:

Not ever per year, that's only over a 9 month period. It would be closer to $6.5BN per year.

Dang...

 

That's like Apple just demoing its entire Spaceship campus (sounds better than the real name sorry), and then some.

[Master Disaster]

Just now, sazrocks said:

Dang...

Its obscene isn't it.

[Sakkura]

13 minutes ago, Master Disaster said:

Anybody who understands business affairs willing to clarify this situation about the auditors not approving the financial report. What exactly does that mean and why would Toshiba publish a financial report without the go ahead from the people who have been brought in to save them?

There are rules saying Toshiba has to file their financial report by a certain date, so eventually they had to release it.

 

The auditors are not there to save them, their job is to check the validity of the numbers. That they haven't signed off on them means they haven't been able to fully satisfy themselves that the numbers are real. Maybe they're just being paranoid after Toshiba's previous attempts to hide losses, or maybe Toshiba is still trying to cover up even worse losses than they're reporting.

[Master Disaster]

3 minutes ago, Sakkura said:

There are rules saying Toshiba has to file their financial report by a certain date, so eventually they had to release it.

 

The auditors are not there to save them, their job is to check the validity of the numbers. That they haven't signed off on them means they haven't been able to fully satisfy themselves that the numbers are real. Maybe they're just being paranoid after Toshiba's previous attempts to hide losses, or maybe Toshiba is still trying to cover up even worse losses than they're reporting.

So it could indicate that things are even worse than Toshiba are reporting, dang.

 

What's funny is I work at a school and only fairly recently (October 2016) they had all the photocopiers replaced with Toshiba units. I'm now wondering if by the end of this year the school might he getting some different ones instead (AFAIK they rent them, not buy them)

[Castdeath97]

48 minutes ago, Energycore said:

Wow that sucks for Toshiba. I wonder what will be of OCZ's SSDs which were for the most part pretty good, if (when) Toshiba sinks I'll be praying that the cool technologies they helped push into the industry don't go with them

 

And espeically so because I own a Toshiba SSD lol. I never felt that their products were below par, but the fact that they lied in their financial statements speaks of a poorly managed company.

Best of luck especially to the employees because being laid off suuuuuuuuuuucks

It's a growing industry, so someone will almost certainly buy it.

[Master Disaster]

22 minutes ago, Castdeath97 said:

It's a growing industry, so someone will almost certainly buy it.

Foxconn seem willing to buy them.

[Bouzoo]

Jua to clarify, Foxconn is about to buy their chip business, not Toshiba as a whole. Toshiba has currently the 2nd largest chip business, right after Samsung and ahead of WD. 

[Monkey Dust]

4 hours ago, sazrocks said:

How do you even get to the point of losing 4.8 BILLION dollars per year? Or do I just not understand how businesses like this work?

The bit that got in trouble, Westinghouse, builds nuclear power stations. In the world of nuclear power stations $4.8 Billion is about half a power station, by 2009 estimates (the most recent estimate Google quickly threw up). Nuclear power became a lot less popular after the Fukushima plant disaster, Germany for example is working on decommissioning (or may have done so already?) all it's nuclear power plants.  

[Master Disaster]

2 hours ago, Bouzoo said:

Jua to clarify, Foxconn is about to buy their chip business, not Toshiba as a whole. Toshiba has currently the 2nd largest chip business, right after Samsung and ahead of WD. 

Well I just added an update, WD are (possibly) trying to stop this from happening.

[Trixanity]

What does Toshiba actually do that is of value besides their chip business?

 

It seems to me it's their most valuable business but also one that requires a massive R&D budget.

[Dylanc1500]

Has Westinghouse already been sold off? If not it would be great for GE to buy it. With the innovation they seem to be bringing to so many markets it would be cool for them to pick up the chip business as well. Having GE branded chips would be pretty neat since they haven't been in the computer industry since '69.

Not to mention they could use it to put chips in all of its other products helping push their advancements in other industries further. That's just possibilities though, not that it would work out that way.

[PlayStation 2]

$4.8 billion in losses?

What the fuck does Toshiba even do to blow that kind of money? Are they pulling a Def Jam and just making a bunch of shit that'll never release?

[Master Disaster]

53 minutes ago, Dan Castellaneta said:

$4.8 billion in losses?

What the fuck does Toshiba even do to blow that kind of money? Are they pulling a Def Jam and just making a bunch of shit that'll never release?

They invested in nuclear power months before Fukushima.

[AlTech]

1 hour ago, Master Disaster said:

They invested in nuclear power months before Fukushima.

Oh rip.

 

Very very rip.

 

All I can say is that I hope the result works out well for everyone involved.