Tuesday, April 11, 2017

Toshiba future in doubt; IMF advises spending cuts for Bahrain; United stock dives after rough treatment of passenger

1 Toshiba future in doubt (BBC) Toshiba has filed its delayed financial results, warning that the company's survival is at risk. "There are material events and conditions that raise substantial doubt about the company's ability to continue as a going concern," the company said in a statement.

The electronics-to-construction giant reported a loss of 532bn yen ($4.8bn) for April to December. However, the results have not been approved by the firm's auditors. These latest financial results have already been delayed twice and raise the possibility that Toshiba could be delisted from the Tokyo Stock Exchange.

Toshiba's president, Satoshi Tsunakawa, apologised for the problems facing the firm and called the auditor's decision not to approve the financial report as "truly regrettable". He said he hoped the company would not be delisted.

Toshiba, originally known for its consumer electronics products, has faced a series of difficulties. An accounting scandal, uncovered in 2015, led to the resignation of several members of the firm's senior management, including the chief executive, after the company was found to have inflated the previous seven years' profits by $1.2bn.

Its problems came to a head again in January this year, when it became clear its US nuclear unit, Westinghouse, was in financial trouble. Westinghouse was put into Chapter 11 bankruptcy in March, which protects it from creditors while it undergoes restructuring.

This week, Taiwanese electronics manufacturer Foxconn was reported to be willing to pay up to $27bn for Toshiba's computer chip business, a move which could help shore up the losses if it went ahead. But that has not been enough to resolve Toshiba's difficulties.

2 IMF advises spending cuts for Bahrain (Gulf News) Bahrain needs to make significant spending cuts to restore stability to its budget and improve investor confidence as the smallest economy among Gulf Arab nations tries to manage the impact of lower oil prices, the International Monetary Fund (IMF) said.

The Washington-based lender said the drop in crude prices has largely offset “significant fiscal measures that were implemented,” causing the budget deficit and public debt in 2016 to stand at 18 per cent and 82 per cent of gross domestic product, respectively.

Bahrain, a close Saudi Arabia ally and the home of the US Fifth Fleet, has been more vulnerable to slumping oil prices than other Gulf Cooperation Council states. The country’s 2016 budget deficit of 1.5 billion dinars ($4 billion), which is larger than its foreign exchange assets, spurred the government to tap both domestic and international markets to fund spending last year.

Economic growth is projected at 2.3 per cent in 2017, which will be “driven by strong infrastructure spending from GCC funds,” the IMF said.

3 United stock dives after rough treatment of passenger (Dominic Rushe & David Smith in The Guardian) The CEO of United Airlines has issued a second public apology about the man who was forcibly removed from a flight on Sunday, calling the incident “truly horrific”. “No one should ever be mistreated this way,” Oscar Munoz wrote in a note to employees, after video posted by fellow passengers showing police dragging the man off the plane went viral.

Munoz was criticized after his official statement on Monday described the violent removal as an effort to “re-accommodate” passengers. He also described the man as “disruptive and belligerent”. As the company’s share prices plunged on Tuesday, however, the executive turned attention back on to the company.

Nearly $1bn of the company’s value was erased in trading on Tuesday. The value of the carrier’s holding company, United Continental Holdings, had fallen over 4% before noon, knocking almost a billion dollars off its value.

The airline’s problems only seem to have escalated since Sunday, when a man was violently removed from a flight by aviation police officials at Chicago’s O’Hare international airport after refusing to volunteer his seat on the overbooked flight. In one video clip, guards aggressively grab then drag the passenger down the aisle of the plane as other passengers shout: “Oh my God” and “Look what you did to him”.

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