Toshiba's Westinghouse has officially filed for bankruptcy protection, raising doubts over its role in Britain's Moorside site

 
Courtney Goldsmith
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(FILES) Picture taken 18 November 2003 o
Westinghouse has been hit by massive cost overruns at two of its US nuclear projects (Source: Getty)

Westinghouse, Toshiba's US nuclear arm, has filed for Chapter 11 bankruptcy after the troubled Japanese conglomerate announced a £5bn writedown on the unit last month.

The firm said its own net loss for the year could reach 1 trillion yen (£7.26bn) compared with a previous estimate of 390bn yen.

The financial troubles at Westinghouse throw fresh doubt over Toshiba's involvement in NuGen, a nuclear joint venture with France's Engie which is building three reactors at the Moorside site in Cumbria.

GMB, the union for nuclear workers, warned the bankruptcy could have "far-reaching consequences" for the UK's future nuclear plans and has demanded certainty for the future of Moorside.

"This project could bring thousands of jobs to West Cumbria, lead to huge regeneration and infrastructure investment and provide as much as seven per cent of the UK's domestic energy needs," said Chris Jukes, senior organiser of GMB.

"It is vital that this project is given the certainty it needs and therefore we are calling on an urgent government announcement to give clear and unambiguous clarity for the short, medium and long term future of Moorside.”

Korea Electric Power Corp (Kepco) is in talks to buy Toshiba's stake in NuGen.

The Pennsylvania-based Westinghouse said it will undertake a "strategic restructuring as a result of certain financial and construction challenges" at its AP1000 US power plants.

It has also received $800m in debtor-in-possession (DIP) financing from a third-party lender to help fund and protect its core business during the reorganisation.

Toshiba said in a statement it will guarantee up to $200m of the financing for Westinghouse and said the US firm will be off its consolidated books as of the end of the month.

Read more: Toshiba misses another results deadline

"Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses," said interim president and chief executive Jose Emeterio Gutierrez.

"We are focused on developing a plan of reorganisation to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader."

Westinghouse will continue its US AP1000 projects during an initial assessment period and said its operations in Asia, Europe, the Middle East and Africa won't be impacted by the filing.

Toshiba is set to report its financial earnings on 11 April after already missing two deadlines, and it's looking to sell part or even all of its prized memory chip business to shore up its balance sheet.

Read more: South Korea's Kepco is in talks to buy Toshiba's UK nuclear stake

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