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It Is Not Over Until It Is Over

14 February 2017 by lberuti

TOSH ( Toshiba Corp ) had promised today would be the day the company explains the extent of the troubles in their nuclear business. Instead, the company prompted hours of chaos when, after missing a self-imposed Tokyo lunchtime deadline to release their earnings, they announced in the afternoon they would ask regulators for another month to finalize the report before eventually publishing hours later provisional figures including a $6.3Bln write-down of their nuclear unit. TOSH said they may pull out of nuclear plant construction, and that all options are on the table, including a sale of Westinghouse Electric Co, its nuclear unit, the woes of which prompted last December sell off. They added they also consider selling a majority stake in their memory chips business, a reversal of their previous plan to limit the sale to 20%. Once investors heard that TOSH could be left without their two biggest remaining assets and could be a shadow of their former selves, they realised it could be the end of it as a company with any hopes to grow. They sent the equity almost 10% lower and the 5-year risk premium 100bps wider at 434bps, back to the wides of December. Meanwhile, the broader credit market stood firm today, despite the wobble of rates and equities during Mrs Yellen’s testimony. Credit indices closed unchanged across the board.