Toshiba might have to pay the buyer, to take failed nuclear unit off its hands.
Toshiba Corp (6502.T) is ‘actively considering’ a sale and other strategic options for U.S. nuclear unit Westinghouse, the group said on Tuesday, as it expanded a probe into problems there that caused it to miss an earnings deadline for a second time.
The Japanese conglomerate said it believed it could find buyers for a majority stake in Westinghouse despite the potential for future losses as the unit had a stable fuel and services business.
But Chief Executive Satoshi Tsunakawa sidestepped questions about a potential Chapter 11 filing for Westinghouse, saying only there were various options. Sources have said bankruptcy lawyers have been hired as an exploratory step.
A sale would represent the latest in a series of drastic steps as Toshiba grapples with a multibillion dollar financial maelstrom stemming from Westinghouse’s ill-fated purchase of a U.S. nuclear power plant construction company in 2015.
It has already put up most or even all of its prized memory chip business for sale to cope with an upcoming $6.3 billion writedown for the nuclear business and to create a buffer for potential losses down the road.
Westinghouse has been plagued by huge cost overruns at two U.S. projects in Georgia and South Carolina and liabilities related to those projects mean it is unlikely to be an easy asset to sell, despite attractive technology.
Tsunakawa emphasized that the projects were only a small part of Westinghouse’s business.
“Around 80 percent of Westinghouse’s revenues come from stable businesses in services and fuel-related businesses so I think that will be taken into consideration too,” he told a news conference.
He added, however, that it was not yet clear yet whether Toshiba would be paid by the buyer or would have to pay the buyer to take Westinghouse off its hands.
Toshiba aims to have Westinghouse off its consolidated accounts by the end of the next financial year in March 2018, he said.
South Korea’s KEPCO is seen by industry executives as the only potential buyer, as it expands in nuclear after a successful deal in the United Arab Emirates……..http://www.reuters.com/article/us-toshiba-accounting-idUSKBN16L02X
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