Toshiba sells bankrupt Westinghouse unit

Just 18 days into the year and 2018 is already looking like being a better year for Toshiba than the previous one. Following on from a tumultuous 2017, the folks at Toshiba may finally be able to muster a smile again. The main reason for the returned optimism is reports surrounding a proposed sale of bankrupt nuclear arm Westinghouse.

In a deal worth around $3.7 billion, Toshiba has said that it has agreed a deal to sell its claim in the bankrupt nuclear plant maker to a group of hedge funds led by the Baupost Group. The Japanese company has also agreed to transfer its Westinghouse-related shares to Canada’s Brookfield Business Partners, which earlier this month agreed to buy the unit for $4.6 billion. The extra money should help Toshiba to resolve its negative net worth and more importantly avoid being delisted from the Tokyo Stock Exchange.

And more so than the financial boost, selling off its stake in Westinghouse will be seen as many as finally cutting all ties with its previous mistakes.

Toshiba’s financial woes are largely connected to its failed nuclear unit Westinghouse. Acquired in 2006, an ill-advised purchase in 2015 led to massive scandal and loses for its parent company. Last year Westinghouse filed for a Chapter 11 bankruptcy and Toshiba was left scrambling to recoup funds.

Toshiba bosses also finally penned an $18 billion deal for its chip unit in September, paving the way for a consortium led by Bain Capital and Apple to take over its memory unit. That sale was then met with opposition from Toshiba partner Western Digital, however an out of court settlement was reached between the two firms paving the way for the sale to go ahead. 

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