Toshiba tumbles for third day as second downgrade fans writedown fears

Shares in Toshiba fell more than 19 per cent in morning trade on Thursday, clocking a third day of heavy losses after the Japanese tech-to-nuclear conglomerate said earlier this week it faced a potential multi-billion dollar writedown.

Late on Wednesday, Moody's became the second rating agency to downgrade the group, pushing it deeper into "junk", or non-investment grade territory, with a Caa1 rating, from B3. "Although Toshiba is still assessing the exact amount of the impairment loss, its financial metrics will likely deteriorate further, potentially resulting in a negative equity position,"said Masako Kuwahara, Moody's Lead Analyst for Toshiba.

Moody's said the downgrade also reflected "mounting concerns" over corporate governance, especially in relation to due diligence for acquisitions.

Toshiba said on Tuesday that cost overruns at a US nuclear business it bought from Chicago Bridge & Iron last year, CB&I Stone & Webster, meant it could face "several billion dollars" in charges, acknowledging a bruising overpayment.

Since Tuesday's first warning, the share drop has wiped about US$6.5 billion (S$9.42 billion) off Toshiba's market value.

Toshiba shares plunged 20 per cent at the market open on Wednesday, immediately hitting the Tokyo exchange's daily downward limit.

At 0200 GMT on Wednesday, the stock was down 15 per cent at 264 yen (S$3.28).