Toshiba CEO Satoshi Tsunakawa

Toshiba CEO Satoshi Tsunakawa

Toshiba’s shareholders look set for an unhappy New Year, as the firm looks set to write off billions of dollars over a recent US nuclear power acquisition.

Following on from a $2.3 billion impairment charge on its US-based subsidiary Westinghouse Electric Company – as well as a recent $1.3 billion accounting scandal – the latest news from Toshiba, caused its shares to fall 12%.

According to a statement from the firm, cost overruns at power projects in the US – which were being handled by the firm it recently acquired from Chicago Bridge & Iron – were, in fact, much greater than were initially anticiapted.

Toshiba’s CEO, Satoshi Tsunakawa, who only took over at the company in June, said a strategy to boost capital would be undertaken. At a news conference, he said, “We would have needed to boost our capital base anyway because our shareholders’ equity ratio is low.”

In fact, as of the end of September this year, shareholders' equity in Toshiba amounted to just 7.5% of assets, a figure that could fall close to zero if the company is forced to log significant ­losses.

Masahiko Ishino, a Tokyo-based business analyst, said the focus now will be on whether or not Toshiba will divest some of its businesses to recoup its recent nuclear power losses.

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