Japanese conglomerate Toshiba is facing an existential crisis – and that has big implications for Britain's energy future.
The threat to the industrial giant, which produces a range of products from consumer electronics to nuclear power, casts doubt on the project to build a new nuclear reactor in Moorside, Cumbria.
Toshiba's shares plunged eight per cent this morning, after it reported it was seeking to delay today's earnings report by a month as it continues to investigate issues at its Westinghouse nuclear subsidiary.
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Company bosses responded to the market unrest by eventually releasing unaudited preliminary results five hours late, the Financial Times reports, and they showed a net deficit for the nine months to December of around Y500bn (£3.5bn), which Toshiba expects will drag down its performance for the full year to the end of March to a loss of Y390bn (£2.7bn).
This is mainly the result of a writedown in excess of £5bn in the value of Westinghouse, in turn caused in large part to a litigation settlement related to the CB&I Stone and Webster construction arm the subsidiary bought last year, says Forbes.
Toshiba's chairman Shigenori Shiga has already resigned and Westinghouse's chief executive Danny Roderick may follow.
Toshiba has also announced it is going to dramatically scale down its overseas nuclear projects, including the £2bn it is investing, through its 60 per cent stake in NuGen, to build the Moorside plant.
If new investors cannot be found quickly, the government could face the prospect of having to use taxpayer funds to keep the project on track, says The Guardian.
As for Toshiba, the latest crisis comes after a troubled two-year period following the revelation of a £780m accounting scandal that cost then-chief executive Hisao Tanaka his job.
The FT says the company must complete a range of planned asset sales to "return to positive shareholder capital" by the end of the financial year and avoid being downgraded to the second tier of the Tokyo Stock Exchange.
Relegation would make it "tougher for the company to attract investors" and so make its troubled turnaround even more difficult.
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