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Toshiba’s U.S. unit Westinghouse to explore Chapter 11 bankruptcy

  • February 24, 2017
  • , The Mainichi
  • English Press

Toshiba Corp. will explore Chapter 11 bankruptcy for its U.S. nuclear power unit Westinghouse Electric Co. among other options in seeking to rebuild its business, while considering using proceeds from sales of its mainstay chip business to continue operating it, sources close to the matter said Friday.

 

Toshiba said earlier this week it expects to post a loss of 712.5 billion yen ($6.32 billion) for the April-December period last year after already posting 250 billion yen in losses in the previous business year through last March.

 

Also Friday, the industrial conglomerate finalized plans to spin off its NAND flash memory chip business into a separate company, saying it is considering selling more than half its stake to restore its fiscal health.

 

The Japanese company is the world’s second-biggest producer of the chips after South Korea’s Samsung Electronics. The chips are used in devices such as smartphones. It aims to gain proceeds worth more than 1 trillion yen.

 

It plans to propose the spinoff at an extraordinary shareholders meeting slated for March 30 and subsequently establish Toshiba Memory Corp. on April 1.

 

While Toshiba is examining a plan to use funds from the selloff to continue operating Westinghouse, a quick rehabilitation by filing for Chapter 11 bankruptcy protection from creditors has been proposed, according to the sources.

 

Toshiba bought Westinghouse, a long-established nuclear power producer in the United States, for about 600 billion yen in 2006.

 

The U.S. nuclear power unit is facing delays in construction of nuclear power plants at home and in China.

 

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