Toshiba’s Westinghouse nuclear division files for Chapter 11
The Westinghouse unit of Japanese technology giant Toshiba plunged into bankruptcy reorganization Wednesday, facing cost overruns and delays with its U.S. nuclear plant projects.
Founded by American inventor George Westinghouse in 1886, Cranberry Township, Pa.-based Westinghouse plans to restructure its business after securing $800 million in bankruptcy financing to continue operating.
But the Chapter 11 filing places Westinghouse’s nuclear projects in South Carolina and Georgia in jeopardy and threatens to drag down Toshiba itself. It also casts doubt on the viability of other nuclear projects amid a slowdown in activity following the Fukushima disaster in Japan in 2011.
Competing energy sources, including natural gas and renewables, also have presented alternatives. U.S. nuclear power generating capacity has been flat since 1990, according to the Energy Information Administration.
The bankruptcy means the future of Westinghouse’s underconstruction plants in Georgia and South Carolina is “uncertain,” Lisa Donahue, restructuring chief of consultancy AlixPartners and chief transition and development officer of Westinghouse, said in a court filing. Westinghouse nuclear reactors power Navy submarines.
The company filed for bankruptcy protection in New York, having accumulated $9.8 billion in debt spread among some 35,000 creditors. Westinghouse has about 12,000 employees.
Toshiba warned Wednesday its full-year loss might balloon to as much as $9.1 billion, up from a previous estimate of $3.5 billion.
Westinghouse said it had reached deals with owners of the U.S. nuclear plants it’s constructing to “continue these projects during an initial assessment period.” The company said the bankruptcy does not affect its operations in Asia, Europe, the Middle East and Africa.
But contracts to construct plants could be subject to cancellation in bankruptcy.