PCR Tech and IT retail, distribution and vendor news
Toshiba’s cash-strapped nuclear unit looks set to file for bankruptcy in the next 24 hours. Bosses at Westinghouse Electric are meeting with American stakeholders and utilities today to propose filing for Chapter 11 bankruptcy. The board will then meet Tuesday morning to reach a final decision on the Chapter 11 petition.
Westinghouse’s financial turmoil has plunged parent company Toshiba into crisis. In total the Japanese country is reportedly set to be hit by more than $6.3 billion in impairment charges relating to its ill-judged purchase of a power plant construction company.
With the value of Toshiba stocks down 2.1% over the weekend, filing for bankruptcy could free Toshiba from Westinghouse and open a medium-term path to recovery.
The alarm bells began ringing for Toshiba earlier this month when the firm missed a second deadline to declare it’s third-quarter earnings. It had been reported that a Japanese bank and a conglomerate of state-funded businesses were preparing a bail out, however that no longer looks likely. Instead, Westinghouse has turned to Korea Electric Power to support its post-Chapter 11 recovery. The South Korean group already works with Toshiba on sharing technology and has now reportedly opened up talks to invest in a UK nuclear power plant project.
A collaboration of Japanese, American and South Korean investors now looks likely to fund the restructuring process of Toshiba and Westinghouse, if it does confirm Westinghouse’s bankruptcy filing. The US government has pledged $8.3 billion of plant-construction-related liabilities tied to one of the delayed projects overseen by Westinghouse.
The firm has already put most of its prized memory chip business up for sale to cope with an upcoming $6.3 billion (£5.1 billion) loss expected for the nuclear business, and has already announced plans to overhaul the day-to-day running of the company. These proposed changes include improving board level oversight, introducing more internal controls, bolstering its risk management system and tightening its grip on the activities of its affiliates.
