Japanese conglomerate Toshiba Corp, which purchased nuclear power plant builder CB&I Stone & Webster in December 2015, said this week that it would likely book a loss of several billion dollars this fiscal year due to high cost overruns associated with nuclear power plant projects.
The company said that costs overruns that came with the purchase from Chicago Bridge & Iron N.V. were higher than expected. Toshiba stock tumbled 12 percent with the announcement, which follows a writedown of the value of its nuclear power division by $2 billion just a year ago. It also follows a recent accounting scandal which shook up the company both on the stock market and in the executive suite, as the company was found to be overstating its profits for years.
This year's financial news comes during a profitable year for Toshiba, which saw an upswing it its microchip sales related to phones made in China. Last year, the company listed a loss of $3.9 billion, whereas the company anticipates a profit of $1.2 billion this year.
CB&I and Toshiba's argument over which company should shoulder the financial losses associated with the cost overruns has gone to court. CB&I is suing Westinghouse over the mater that began with Westinghouse claiming it was owed more than $2 billion.
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The courts have ruled that westinghouse cannot pass the majority of that 2 billion on to CB&I so how do they come back to this?
