Toshiba says Westinghouse files for bankruptcy protection

Toshiba says Westinghouse files for bankruptcy protection

TOKYO — Japan’s embattled Toshiba Corp. said Wednesday that its U.S. nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection, marking a key step in its struggles to stop the flow of massive red ink.

Toshiba said in a statement that it filed the Chapter 11 petition in the U.S. Bankruptcy Court of New York. The move had been largely expected.

Toshiba has said it’s expecting a loss of 500 billion yen ($4.3 billion) for April-December of last year, including a 712.5 billion yen ($6.2 billion) hit from its embattled nuclear business. It said Wednesday that it was working out revised numbers, and warned that the loss for the fiscal year may grow to 1 trillion yen ($9 billion).

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 $9.8 billion.

Toshiba President Satoshi Tsunakawa said the move was aimed at “shutting out risks from the overseas nuclear business.”

“We want to make this our first step toward recovering our solid business,” he told reporters after the announcement.

Toshiba reiterated its view that at the root of the problem was the acquisition of U.S. nuclear construction company CB&I Stone and Webster. It declined comment on possible future partners in the rehabilitation of Westinghouse.

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.

Satoshi Ogasawara, who has written a book about Toshiba’s systematically falsifying financial results, says executives knew of the problems for years but kept procrastinating, hoping against hope that things would get better and they would be able to avoid blame. But things just got worse.

“Buying Westinghouse was the beginning of the end,” he said. “But even before that, there was a dubious corporate culture.”

Toshiba already faced problems in its personal computer business amid competition from Dell, Lenovo and HP. The drop of oil prices combined with the Three Mile Island and Fukushima accidents made nuclear power less lucrative, and plant construction kept getting stonewalled, said Ogasawara. He believes many executives responsible for the mess are still at Toshiba, without being held responsible.

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.

___

Follow Yuri Kageyama on Twitter at https://twitter.com/yurikageyama

Her work can be found at http://bigstory.ap.org/content/yuri-kageyama

Yuri Kageyama, The Associated Press

Just Posted

Fire destroys storage unit business in Kelowna

The fire was reported at Hawkeye Holdings just after 2 p.m. Thursday

Multi-vehicle collision slows Highway 97 in Kelowna

Two-car crash slows traffic to a crawl near University Way

West Kelowna Warriors search financial partners

Coummunity investements would allow reinvestments into the Warriors programs

Kelowna paddle board event to raise cash for brain injuries

Fifth annual Pihl Law Paddle for Prevention for BrainTrust comes to lake this August

Lightning strike sparks fire off Highway 33

BC Wildfire is reporting a small blaze outside Kelowna

Feds lowered poverty line, reducing the number of seniors in need: documents

Liberals introduced a poverty line that was below the prior low-income cutoff

$900M settlement reached in class action on sexual misconduct in Canadian military

After facing criticism, the government moved to begin settlement proceedings in early 2018

Tax take stays ahead of increased B.C. government spending

Tax revenue $2.1 billion higher than budget in 2018-19

Two toddler siblings found drowned on First Nation in Alberta

The Siblings were found drowned on their family’s property, according to RCMP

Penticton resident’s dog allegedly stolen from construction site

Nicholas Bozak is seeking the public’s assistance in locating Askem, his 17 month old mastiff chow

Chiefs honour Indigenous leader wrongfully hanged in B.C. 154 years ago today

Chief Joe Alphonse says they want his remains returned to his homeland in B.C.’s Cariboo region

RDOS construction activity shows increase

264 permits, worth nearly $26M, have been issued in first half of 2019

Snowbirds touch down in the South Okanagan

Canadian Forces Snowbirds make pit stop in Penticton

Rare white ravens spotted again on Vancouver Island

Nature photographer Mike Yip said mysterious birds back in Coombs area

Most Read