According to a report by Kyodo News on March 29, relevant persons revealed on the 29th that Toshiba's American nuclear electronics company Westinghouse Electric, which is in the period of business restructuring, decided to apply for Article 11 of the US Federal Bankruptcy Act and have initiated relevant procedures. Toshiba also approved it at the board of directors that day. It is expected to apply immediately on the day after the application is submitted. This is equivalent to the reorganized bankruptcy process of Japan's Civil Regeneration Act, and Toshiba will determine the estimated loss amount of 1 trillion yen (about 62 billion yuan).
In the future, Toshiba will remove Westinghouse Electric from the merger settlement targets and withdraw from overseas nuclear power business to revitalize its financial foundation.
As Westinghouse Electric's parent company, the application of bankruptcy law could significantly reduce Toshiba's initially estimated losses of more than 700 billion yen, but Toshiba will provide debt guarantees of about 800 billion yen, and the losses may also be further increased. To fill the gap, Toshiba will speed up the sale of its semiconductor business.
If the bankruptcy law is applied, the recovery and litigation of Westinghouse Electric will automatically stop, and Westinghouse Electric will formulate a restructuring plan while continuing its business. If the creditors and courts can be approved, the plan can be implemented to achieve restructuring as soon as possible.
Toshiba spent more than 600 billion yen to acquire Westinghouse Electric in 2006, but it suffered huge losses due to the difficulties of the US nuclear power construction.
Westinghouse Electric has provided reactors to US nuclear-powered aircraft carriers and nuclear submarines. The US is concerned that military power secrets may be leaked depending on the companies supporting Westinghouse Electric's restructuring. Reuters Washington reported on the 28th, citing U.S. government sources as saying that the Trump administration has expressed concern and believes that "this is a potential national security issue."
Japanese Chief Cabinet Secretary Yoshihide Suga pointed out at a press conference on the 29th that "the Japanese and American governments are working closely together to carry out responses." He said that in order to achieve Westinghouse Electric's restructuring, "look forward to constructive discussions (between relevant persons).
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