Toshiba shares fell 20% on Wednesday after the firm warned that its US nuclear business may be worth less than previously thought.
The slump was large enough for trading in stocks of the Japanese industrial giant to be automatically halted. Shares had already fallen 12% on Tuesday, after reports of the likely write-down began circulating. Toshiba said the possible heavy one-off loss was linked to a deal done by a US subsidiary, Westinghouse Electric. Westinghouse bought the nuclear construction and services business from Chicago Bridge & Iron in 2015. But there is now a dispute over the costs of the deal and the value of the assets it took on. Toshiba President Satoshi Tsunakawa apologised for “causing concern”.
The news is a blow for the firm’s corporate reputation, which is still struggling to recover after it emerged profits had been overstated for years – prompting the chief executive to resign. Since then, Toshiba has been trying to slim down the business, including selling its medical devices operations to Canon. But while the share price slump is a blow for investors, 2016 has still been a pretty good year for the firm’s stocks – which had gained more than 77% before this week’s falls.