Japan’s embattled Toshiba Corp. said Wednesday that its U.S. nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection, marking a key step in its struggles to stop the flow of massive red ink.
Toshiba said in a statement that it filed the Chapter 11 petition in the U.S. Bankruptcy Court of New York. The move had been largely expected.
Toshiba has said it’s expecting a loss of 500 billion yen ($4.3 billion) for April-December of last year, including a 712.5 billion yen ($6.2 billion) hit from its embattled nuclear business. It said Wednesday that it was working out revised numbers, and warned that the loss for the fiscal year may grow to 1 trillion yen ($9 billion).
Toshiba acquired Westinghouse in 2006 with much fanfare, making nuclear power an important part of its business strategy.
After the March 2011 nuclear disaster in Fukushima, costs of the business have ballooned because of growing safety concerns and regulations, and a souring of sentiment toward nuclear power in some countries, such as Germany.
Toshiba has been eager to get Westinghouse off its books to improve its plight, and it said it would do just that from this fiscal year. It has said earlier it wants to sell Westinghouse. Toshiba said Westinghouse had racked up debt of $9.8 billion.
Toshiba President Satoshi Tsunakawa said the move was aimed at “shutting out risks from the overseas nuclear business.”
“We want to make this our first step toward recovering our solid business,” he told reporters after the announcement.
Toshiba reiterated its view that at the root of the problem was the acquisition of U.S. nuclear construction company CB&I Stone and Webster. It declined comment on possible future partners in the rehabilitation of Westinghouse.
Toshiba, which has been unable to report its financial results as required, postponing it into next month, said it would monitor…
Source: Mobile Tech Today