Toshiba Corp wants Westinghouse, its nuclear unit operating out of the U.S., to file for Chapter 11 protection from creditors as early as Tuesday, March 28, according to a source with direct knowledge of the matter, seeking a quick containment of losses before the Japanese parent’s financial year ends.
While a Westinghouse bankruptcy filing would help limit future losses for Toshiba, it still falls far short of drawing a line under its problems.
Any filing would trigger complex negotiations between Toshiba, the nuclear unit and creditors, and could embroil the U.S and Japanese governments given the scale of the collapse and U.S. state loan guarantees for new reactors.
A worry for Prime Minister Shinzo Abe is that a bankruptcy would give U.S. President Donald Trump cause to criticize Japanese firms operating in the United States.
The future of Toshiba and Westinghouse has already been raised in bilateral talks, with Japan’s Trade Minister Hiroshige Seko agreeing to share information on developments during talks in Washington with his U.S. counterparts Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross.
The source said Toshiba is keen on a Tuesday filing as it would prefer to avoid a day close to a shareholders meeting on Thursday, March 30, that will seek approval for the sale of its prized memory chip unit.
The Japanese conglomerate wants to avoid upsetting investors as it seeks to sell more than half of its chips unit and gain funds that would allow it to remain viable as it absorbs losses at Westinghouse.
Toshiba on Monday, March 27, reiterated a previous statement that it was premature to comment on a potential bankruptcy.
The company’s main lenders, including Sumitomo Mitsui Banking Corp and Mizuho Bank Ltd may also balk at a March 28 filing. They favor an even more cautious approach to shareholders, said a financial source familiar with the matter.
