Japan’s embattled Toshiba Corp. said today that its US nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection. Toshiba said in a statement that it filed the chapter 11 petition in the US Bankruptcy Court of New York. The move had been largely expected. Toshiba is expecting a loss of 500 billion yen (USD 4.3 billion) for April-December of last year, including a 712.5 billion yen (USD 6.2 billion) hit from its embattled nuclear business. 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 USD 9.8 billion.
Toshiba reiterated its view that at the root of the problem was the acquisition of US nuclear construction company CB&I Stone and Webster.
Toshiba, which has been unable to report its financial results as required, postponing it into next month, said it would monitor the rehabilitation proceedings and disclose information as quickly as possible. Its chairman has resigned to take responsibility for the company’s troubles. Auditors questioned Toshiba’s latest reporting on the acquisition of CB&I Stone & Webster after a whistleblower, an employee at Westinghouse, wrote a letter to the Westinghouse president.
The company’s reputation has also been tarnished in recent years by a scandal over the doctoring of accounting books to meet unrealistic profit targets. The company has said it will no longer take on new reactor construction projects and will focus on maintaining the reactors it already has. But it is also involved in the decommissioning of the Fukushima Dai-ichi nuclear plant, which suffered multiple meltdowns after the March 2011 tsunami.
Toshiba has sold off so many parts of its once prized operations, such as computer chips and household appliances, it has little left but its infrastructure business.