Japan’s embattled Toshiba Corp. revealed on Wednesday afternoon that its US nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection. This step has been taken under Chapter 11 for protection from creditors, three months after huge cost overturns were flagged. The financial burden has left no other option for the Japan-based company but to limit the losses that have posed a questioned mark over its future.
This step by Toshiba has produced a major problem for India as well. About two years ago, Prime Minister Narendra Modi and US President Barack Obama had set parameters to implement the historic nuclear deal signed between the two countries in 2008. The deal was stuck over liability issue and both sides had agreed to finalise contractual arrangements by 2017. However, after the latest developments, it is still unclear if the US will be able to deliver on it or not.
Despite the major financial crisis, response from both the nations has been very positive so far. “We understand that Westinghouse continues to stand behind the delivery model that it presented in its Technical Commercial Offer to India… and looks forward to progress on an agreement in 2017… We reaffirm USG commitment to civil nuclear cooperation with India,” told a US Embassy spokesperson to NDTV. “As long as the guarantees are in place, I see no reason why this won’t go ahead,” Shailendra Roy, head of L&T’s power business, told Reuters.
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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 a 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.
(with input from agency)