Toshiba's Westinghouse files for US bankruptcy protection

Makiko Yamazaki and Tim Kelly, Reuters

Posted at Mar 29 2017 04:29 PM

The Vogtle Unit 3 and 4 site, being constructed by Westinghouse, a business unit of Toshiba, near Waynesboro, Georgia, US.Reuters/Photo

TOKYO - Toshiba Corp's troubled US nuclear unit Westinghouse filed for Chapter 11 protection from creditors on Wednesday, as its Japanese parent seeks to limit losses that have plunged it into crisis.

A bankruptcy filing will allow Pittsburgh-based 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.

For Toshiba, the aim is to mitigate liabilities stemming from guarantees it provided backing the contractor's work. Toshiba said Westinghouse-related liabilities totaled $9.8 billion as of December.

Westinghouse said it as secured $800 million in financing to fund and protect its core businesses during its reorganization.

Toshiba, whose shares have crashed as Westinghouse's problems surfaced, said in a statement it would guarantee up to $200 million of the financing for Westinghouse, adding that the troubled unit would be removed from its consolidated books at the end of the month.

The Japanese company said it would hold a news conference at 0845 GMT (4:45 p.m. in Manila)

Westinghouse, which made the filing at the US. Bankruptcy Court for the Southern District of New York, said that its operations in Asia, Europe, the Middle East and Africa would not be impacted by the filing.

"We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader," Westinghouse Interim President and CEO Jos Emeterio Gutirrez said in a statement.