Toshiba shares plummet as firm looks likely to miss third earnings report deadline

Troubles at Toshiba continue to mount, with reports that the Japanese conglomerate is set to miss a third deadline to declare its quarterly earnings. Shares in the tech company have plummeted since Reuters reported that the company is on the brink of postponing its October-December earnings for a third time.

In the early morning trade, shares in Toshiba plunged 9.4 per cent after it was reported that the firm is going to miss the April 11 deadline to declare its earnings. The postponement looks necessary as Toshiba’s auditor PricewaterhouseCoopers Aarata still has unanswered questions about the entire business year up until March 2016.

However, a Toshiba spokesman said that the possibility of a postponement was not something that the company had decided on and it is still preparing to meet the April 11 deadline.

Earlier this week Toshiba declared a Chapter 11 bankruptcy for its nuclear arm Westinghouse, giving it the opportunity to renegotiate its failing contracts. The multinational conglomerate first called in bankruptcy lawyers earlier in the month after missing an earnings deadline for a second time. They have now confirmed loses of $9.8 billion for its nuclear unit Westinghouse. This is largely down to an ill-fated purchase of a power plant construction firm in the US that has been haemorrhaging money. Filing for bankruptcy now allows the company the opportunity to renegotiate that contract or break it off completely. 

The decision to file for bankruptcy looks to have sparked a mass sale of shares in the company’s profitable chip business to offset loses from the failed nuclear unit. A consortium led by South Korea’s SK Hynix Inc has reportedly offered to pay more than $9 billion for a majority stake in Toshiba Corp’s memory chip business. Sources say the Korea-Japan alliance is preferred, due to Japanese government’s concerns over tech leaks to rivals, particularly in the US. A consortium of state-funded businesses and Japanese banks had previously been mooted as a possible backer.SK Hynix is the world’s second-largest DRAM chipmaker and the fifth most profitable firm in terms of NAND sales. Toshiba is currently the second-largest NAND chipmaker, and a potential merger would see SK Hynix-Toshiba surpass Samsung Electronics as the largest NAND manufacturer.