Westinghouse files for Chapter 11 bankruptcy protection

March 29, 2017

TOKYO- Westinghouse Electric Co., a US nuclear arm of Toshiba Corp. , filed for Chapter 11 bankruptcy protection on Wednesday.

The struggling Japanese electronics and machinery maker is now poised to accelerate its efforts to withdraw from the overseas nuclear operations that have incurred massive losses.

Toshiba plans to sell its Westinghouse stake while winning the understanding of major creditors of the US nuclear plant builder.

But it may be difficult for Toshiba to find a buyer of the stake as the nuclear power industry faces a tough business environment.

Toshiba President and Chief Executive Officer Satoshi Tsunakawa is scheduled to hold a press conference in Tokyo later on Wednesday.

The board of Japan ‘s Toshiba Corp. confirmed on Wednesday a plan by US nuclear unit Westinghouse Electric Co. to file for Chapter 11 bankruptcy protection.

The struggling Japanese electronics and machinery maker aims to limit the risks of further losses by placing Westinghouse under a court-backed restructuring process.

Toshiba plans to sell its Westinghouse stake in fiscal 2017, which starts Saturday, to withdraw from overseas nuclear operations, informed sources said.

The Japanese company thinks that a US court’s involvement in Westinghouse’s restructuring will help smooth the way for the sale, the sources said.

Toshiba is expected to post some one trillion yen in losses related to nuclear operations in the year ending Friday, including those linked to 800 billion yen in debt guarantees to Westinghouse.

Toshiba, which is likely to face an excess of debts over assets as of Friday, plans to sell its flash memory business, a main source of profit, so as to get out of the dire financial situation at an early date.

Some have raised concerns that Westinghouse’s Chapter 11 filing may develop into a political problem between Tokyo and Washington if it leads to any suspension of nuclear plant construction works in the United States or affects employment there.

“We’re of course aware of the (Chapter 11) filing plan,” Japanese Chief Cabinet Secretary Yoshihide Suga told a press conference. The Japanese and US governments “are in close contact” on the matter, he said. Jiji Press