Toshiba decides on Westinghouse bankruptcy, sees $9 billion in charges: sources

Fri Mar 24, 2017 1:14pm EDT
 
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By Taro Fuse

TOKYO (Reuters) - Japan's Toshiba Corp has informed its main lenders it is planning for U.S. nuclear unit Westinghouse Electric Co LLC to file for bankruptcy on March 31, people briefed on the matter said on Friday.

Toshiba expects a Chapter 11 filing for Westinghouse would expand charges related to the U.S. unit in the current financial year to around 1 trillion yen ($9 billion) from its publicly flagged estimate of 712.5 billion yen, the people also said.

A move to file, however, allows the TVs-to-construction conglomerate to limit risks from future losses at Westinghouse, which has been plagued by huge cost overruns at two U.S. nuclear projects. The decision comes only three months after Toshiba first warned of multibillion dollar charges for Westinghouse.

The ensuing financial maelstrom has already caused Toshiba to put up its prized memory chip unit for sale, consider a sale of a majority stake in Westinghouse and miss deadlines to file earnings that have put it at risk of a delisting.

Toshiba is now in discussions with the lenders over financing after Westinghouse's potential Chapter 11 filing, said the people, who declined to be identified as they were not authorized to speak to media on the matter.

Toshiba said on Friday it was not appropriate to comment prematurely.

"Whether or not Westinghouse files for Chapter 11 is ultimately a decision for its board, and must take into account the various interests of all of its stakeholders, including Toshiba and its creditors," it said in a statement.

Toshiba's main creditor banks include Sumitomo Mitsui Banking Corp and Mizuho Bank Ltd. Representatives for the bank were not immediately available for comment outside regular business hours.   Continued...

 
FILE PHOTO:  The logo of Toshiba Corp. is seen at the company's facility in Kawasaki, Japan February 13, 2017. REUTERS/Issei Kato/File Photo