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Troubled Westinghouse may need to file for Chapter 11: Aso

  • March 10, 2017
  • , Kyodo News
  • English Press

Toshiba Corp.’s troubled U.S. nuclear unit Westinghouse Electric Co. may need to file for Chapter 11 bankruptcy by the end of March, Japan’s Finance Minister Taro Aso said Friday.

 

Aso, speaking to reporters after a Cabinet meeting, said Toshiba’s earnings results cannot be finalized before Westinghouse’s decision on Chapter 11.

 

“It depends on (Westinghouse’s decision on) Chapter 11,” Aso said when asked if Toshiba can meet its March 14 deadline for the earnings release.

 

Westinghouse’s filing for Chapter 11 is an option, sources close to the matter said Thursday.

Economy, Trade and Industry Minister Hiroshige Seko told reporters that many companies have gotten back on their feet after restructuring under Chapter 11.

 

Scandal-hit Toshiba last month delayed the release of its earnings for the April-December period, saying the Japanese industrial conglomerate needs to examine alleged “inappropriate pressure” by some of Westinghouse’s management.

 

Westinghouse, which Toshiba bought in 2006, has been mired in delays in construction of nuclear power plants and increasing costs. Toshiba has said it expects to post a loss of 712.5 billion yen ($6.2 billion) in its U.S. nuclear business for the nine months through December.

 

While the struggling company plans to report results for the nine months through December next Tuesday, sources have said that the chances of the company meeting its deadline are “fifty-fifty” and could once again push it back.

 

The company said last month it estimates a group net loss of 390 billion yen for the full year through March 31, rather than its previous forecast of a 145 billion yen profit, and is also likely to post a negative net worth at the end of the year.

 

Uncertainty remains over the reemergence of Toshiba, a household name in Japan. The company has placed nuclear power and chip businesses as growth drivers, but it is now considering spinning off the chip unit.

 

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