Japan’s Toshiba Corp. announced that its US nuclear power unit Westinghouse Electric Co. has filed for Chapter 11 bankruptcy protection following huge losses and a huge debt burden.
The company filed the petition in the US Bankruptcy Court of New York on Wednesday, it said.
The move came after Westinghouse incurred billions in cost overruns related to four nuclear reactors it is building in the southeastern US, the Wall Street Journal reports.
The runaway costs from the half-finished reactors threatened the viability of the Japanese parent company.
“This is a de facto withdrawal from the overseas nuclear business for us. Therefore, we don’t see any more risk,” Toshiba Chief Executive Satoshi Tsunakawa was quoted as saying.
Toshiba acquired Westinghouse in 2006, making nuclear power an important part of its business strategy.
But the business has been saddled with losses and affected the prospects of Toshiba, whose precarious finances have attracted the attention of Japan’s government, the Journal noted.
Toshiba has said earlier that it expects to post a loss of about US$4.3 billion for the nine months ended December, factoring in a more than US$6 billion hit from the troubled nuclear business.
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