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Toshiba's Westinghouse to file for Chapter 11: Japan government

TOKYO Toshiba Corp’s (6502.T) troubled U.S. nuclear unit Westinghouse intends to file for Chapter 11 protection from creditors, Japan’s government said on Wednesday, as the conglomerate seeks to limit losses that have plunged it into crisis.

Yoshihide Suga, the government’s chief spokesman, told a regular news briefing he was aware that Pittsburgh-based Westinghouse plans a bankruptcy filing. Sources with knowledge of the situation have said that the filing could come as early as Tuesday.

Japan’s Nikkei business daily reported Toshiba had approved the filing at a board meeting earlier in the day. Toshiba said it could not comment on issues discussed at its board meetings.

A bankruptcy filing would allow Westinghouse, whose nuclear plant projects have been dogged by delays and cost overruns, to renegotiate or break its construction contracts, although the utilities that own the projects would likely seek damages.

It would imperil the completion of Westinghouse’s nuclear power plants under construction in the southern United States, where ratepayers have already been covering some of the costs in their monthly electricity bills.

The future of Westinghouse has already been raised in bilateral talks between Japan and the United States with Japan fearing that Westinghouse’s collapse will incite criticism from U.S. President Donald Trump over the impact it could have on local jobs and finances.

The U.S. government has granted loan guarantees totaling $8.3 billion to the utilities commissioning the Georgia project. Westinghouse also has nuclear projects in varying degrees of development in India, the United Kingdom and China.

The company, founded by American engineer and inventor George Westinghouse in 1886, employs 12,000 people worldwide, according to its website.

(Reporting by Makiko Yamazaki and Hitoshi Ishida; Additional reporting by Scott DiSavino and Jessica DiNapoli in New York and Tom Hals in Wilmington, Delaware; Writing by Naomi Tajitsu; Editing by Edwina Gibbs)

Reuters