Not over yet: The Tokyo-based conglomerate is still recovering from an accounting scandal in 2015. — Reuters
TOKYO: Toshiba Corp said on Friday it was not aware that its US nuclear unit Westinghouse was considering seeking protection from creditors, an option analysts say could put the entire TVs-to-construction conglomerate at risk if exercised now.
The Nikkei business daily reported that Toshiba was looking at a potential Chapter 11 filing as one of several options for Westinghouse, which has been plagued by cost overruns at two US projects.
It added, however, that there was disagreement among management on the merits of such a filing.
In theory, it could help the Japanese firm draw a line under problems at Westinghouse that have resulted in a planned US$6.3 billion writedown, forcing Toshiba to put a majority stake in its prized chips business up for sale this month.
But Chapter 11 bankruptcy protection would not be a straightforward proposition for Toshiba, which has guaranteed as much as 793.5 billion yen (US$7 billion) to cover potential Westinghouse liabilities.
A spokesman for Toshiba said he was unsure how any US bankruptcy filing would affect that commitment.
Analyst Hideki Yasuda at Ace Research Institute said Toshiba would likely wait before making any bankruptcy filing, first filling its balance sheet hole and rebuilding cash reserves to pay any guarantees due.
"Chapter 11 is the best way for Toshiba to clear up all potential liabilities and losses over Westinghouse. But right now it's not an option," said Yasuda.
The company on Friday said it wants to sell most of the flash memory unit with a final decision before the end of March next year.
The company plans to raise at least 1 trillion yen from the sale, enough to cover the Westinghouse writedown and create a buffer for any fresh financial problems, sources told Reuters earlier. - Reuters
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