Japan Post seen taking giant loss on Toll Holdings acquisition

Japan Post Holdings Co. might post impairment losses worth hundreds of billions of yen for fiscal 2016 related to its acquisition of an Australian logistics firm in 2015, sources close to the matter said Thursday.

Toll Holdings Ltd. is reeling from declining parcel volumes sparked by a drop in Australia’s natural resource prices, they said. The potential loss could affect the Japanese government’s plan to sell its stake in the postal giant, which also has banking and insurance units.

The development is the latest example of losses chalked up by Japanese firms that have embarked on overseas expansions, including Toshiba Corp., whose U.S. nuclear unit Westinghouse filed for bankruptcy protection last month.

Japan Post is looking to write down the value of the assets at Toll Holdings, recognizing goodwill exceeding its original estimate. It acquired the transport group for around 6.48 billion Australian dollars in May 2015.

The company said in a news release that it is studying whether it needs to book impairment losses but did not clarify the amount. It also said Toll Holdings’ performance has failed to meet initial plans.

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