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Nuclear power station builder Westinghouse file for Chapter 11 bankruptcy protection as Japanse owner Toshiba seeks exit

Wednesday, March 29, 2017 6:57
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Nuclear power station builder Westinghouse has filed for Chapter 11 bankruptcy protection as its owner Toshiba seeks to exit the troubled business that has pushed the Japanese group to the edge of financial collapse.

The bankruptcy protection filing followed talks between Toshiba, its lenders and Westinghouse’s creditors as the Japanese group scrambles to offload the subsidiary before the end of its fiscal year on March 31.

Toshiba is wrestling with a US$6.3bn writedown on its US nuclear business, with Westinghouse having suffered huge cost overruns at two US projects in Georgia and South Carolina, which are now estimated to cost US$11bn more than originally budgeted.

Toshiba said the bankruptcy would not affect Westinghouse’s UK operation, which employs more than 1,000 workers.

However, the Japanese firm that the writedown of its US nuclear business could its total losses last year exceed 1 trillion yen (US$9.1bn), almost triple its previous estimate.

The difficulties at Westinghouse have sent Toshiba shares into freefall, losing more than 60% since the company first unveiled the problems in December 2016.

In February, the company’s chairman stepped down and the firm delayed publishing its results over disagreements with its auditors.

Story by ProactiveInvestors


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