Toshiba to file for bankruptcy as Westinghouse losses mount to $9 bn
27 Mar 2017
Toshiba Corp's US nuclear Westinghouse Electric Co LLC, unit could file for bankruptcy after it reported $9 billion (¥1 trillion) in losses, up from its earlier estimated charges of ¥712.5 billion yen.
Toshiba had acquired Westinghoue from the UK-based British Nuclear Fuels in 2006 for $5.4 billion, beating Mitsubishi and General Electric to the deal (See: Toshiba buys Westinghouse for $5.4 billion )
Toshiba is reported to have informed its creditors that it will file for Chapter 11 protection before 31 March in order to ring fence losses ahead of the end of its financial year.
Reports also said that the planned filing for Westinghouse - the centre of its multi-billion dollar crisis – is unlikely to come any soon as the issue is complex and involves the Japanese and US governments.
Toshiba, however, continues to maintain its earlier stance that it is premature to comment on a potential bankruptcy.
Toshiba is also reported to have planned a tentative 28 March filing for bankruptcy of its US nuclear power business, although there is no certainty of it coming through anytime soon.
The huge cost overruns that brought about a financial catastrophe at Westinghouse has forced Toshiba to put its prized memory chips unit up for sale and miss deadlines for filing earnings report.
Toshiba will seek shareholders' approval for the sale of the chip unit at a meeting on Thursday, while Chapter 11 filing for Westinghouse would be done by the US unit's board and would not require approval by Toshiba's shareholders.
Westinghouse is in the process of building the Virgil C Summer Nuclear Generating Station in Fairfield County, South Carolina, and the Vogtle Electric Generating Plant in Burke County, Georgia, in the US. Scana Corp and Santee Cooper own the plants in South Carolina, and Georgia Power leads a consortium that commissioned the Georgia plants.
A bankruptcy would make these utility companies the largest creditors to Westinghouse.
Toshiba is reported to have asked South Korea's Korea Electric Power Corp (KEPCO) to sponsor the bankruptcy reorganization of Westinghouse.