Toshiba Revises Forecast, Expects Net Loss of Almost $1 Billion

Toshiba Corporation reported today that it expects a net loss of nearly $970 million (110 billion yen) for its fiscal year that will end on March 31, 2017 after taking into account taxes related to its proposed sales of its memory-chip business, Toshiba Memory Corporation.

On the positive side of things, in August, the firm had avoided being delisted from the Tokyo Stock Exchange.

Toshiba is expecting to sell Toshiba Memory Corporation for $17.6 billion (2 trillion yen) to a consortium led by private-equity firm Bain Capital, although its partner in the memory business, Western Digital, continues to object to the sale.

Toshiba had previously forecast a profit of 230 billion yen for its fiscal year. Its latest forecast, however, doesn’t expected gains of $17.6 billion (2 trillion yen) it will gain from the sale of the memory business, as it has yet to receive regulatory approval for the sale.

If Toshiba doesn’t sell its memory business, it could end the year with a negative net worth, which might prompt the Tokyo Stock Exchange to delist it. Toshiba’s proceeds from the sale of the memory business are essential in order for Toshiba to cover billions of dollars in liabilities arising from its now bankrupt U.S. nuclear business, Westinghouse. Toshiba reported on October 24th that its board of directors had approved the sale.

Toshiba America Business Solutions is part of Toshiba Business Solutions, and both are  subsidiaries of Toshiba TEC, which in turn is a subsidiary of Toshiba Corporation of Tokyo.

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