March 24, 2017
TOKYO- Struggling Japanese electronics and machinery giant Toshiba Corp. is in the final stages of talks with creditor banks on filing for Chapter 11 bankruptcy protection for its US nuclear power plant unit, Westinghouse Electric Co., it was learned Friday.
Toshiba is seeking financial support from the banks, assuming that Westinghouse will decide on a Chapter 11 filing by the end of this month, informed sources told Jiji Press.
Specifically, Toshiba is hoping that Westinghouse can secure sufficient funds to continue its construction of nuclear power facilities even after the start of bankruptcy protection procedures, the sources said. The request for financial aid also reflects Toshiba’s deteriorating financial standing, they said.
According to Japanese financial industry sources, Toshiba explained to Sumitomo Mitsui Banking Corp. and Mizuho Bank, its main creditor banks, that the bankruptcy filing by Westinghouse is expected to push up Toshiba’s loss from the nuclear power business to around one trillion yen and to force the company to have an excess of debts over assets not only in terms of shareholders’ equity but also in net assets.
Toshiba previously said it expects to incur a loss of 712.5 billion in its nuclear power business in the fiscal year ending this month, but the loss is now likely to expand by around 300 billion yen, the sources said.
In asking for assistance, Toshiba has explained to its creditor banks that it has no choice but to take the option of bankruptcy protection for Westinghouse in order to cut off the risk of suffering further losses from the overseas nuclear power business.
In view of protracted talks between Westinghouse and its creditors, however, observers say the US company may not file for Chapter 11 until April. Jiji Press
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