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Toshiba reiterates 'going concern' warning

Toshiba Corp. once again warned of "substantial doubt" as to whether it can stay in business.

The Japanese conglomerate in an Aug. 10 earnings release disclosed consolidated equity attributable to shareholders of negative $4.5 billion from April through June, largely attributed to the "extraordinary loss" after the March bankruptcy of Westinghouse Electric Co. LLC, its nuclear unit.

"Taking into consideration of the expenditures which [Toshiba] may pay related to nuclear power construction by Westinghouse, its U.S. subsidiaries and affiliates, the Company's liquidity will be significantly impacted," according to the release. "For the reasons stated above, there are material events and conditions that raise the substantial doubt about the Company's ability to continue as a going concern."

Toshiba issued a similar statement in April to accompany an earnings report that month.

Reuters reported Aug. 9 that Toshiba, for now, will not be delisted from the Tokyo Stock Exchange after its auditor, PricewaterhouseCoopers Aarata LLC, approved the company's accounting. But PwC also criticized Toshiba, saying it was late in booking its Westinghouse losses.

PwC was not able to sign off on Toshiba's previous quarterly earnings in time for their April release, due in part to the company evaluating investigations related to Westinghouse's 2015 acquisition of nuclear construction company CB&I Stone & Webster.

Toshiba has been looking into a potential sale of all or a majority stake in its memory chip business, and the company said it is in the process of transferring the memory unit's assets and liabilities into a newly formed company to "create a more agile structure, that will allow for speedy management decisions."

If and when this transaction occurs, Toshiba said, it will allow the company to secure repayment of borrowing to financial institutions, along with rebuilding capital and recovering consolidated equity attributable to shareholders.

Toshiba has guaranteed $5.85 billion to cover costs for the owners of the Alvin W. Vogtle and V.C. Summer nuclear plant projects: $3.68 billion for Vogtle's four owners and $2.17 billion for Summer's two owners, which recently abandoned their expansion.