Toshiba’s US nuclear unit has filed for bankruptcy, after a series of heavy losses hit the Japanese parent company.
Westinghouse, the name of the nuclear unit, suffered huge cost overruns at two US projects in Georgia and South Carolina and had previously warned investors of its difficulties. The Japanese government confirmed it was aware of the company’s plans.
Toshiba is expecting a loss of £3.5 million for April-December of last year, including a £5 billion hit taken by Westinghouse. Assets that it took on were found to be worth less than initially thought, and there was also a dispute over payments.
Filing for bankruptcy should limit Toshiba’s losses and minimise the effect on shares. Toshiba’s share price has dropped over 60 percent since problems were first reported in December.
The difficulties faced also create new problems for the UK’s plans to build Europe’s largest nuclear plant. The UK had been considering building a 3.8GW nuclear power plant in Moorside in Cumbria; however, embattled Toshiba is a 60 percent shareholder in the NuGeneration consortium, who would develop Moorside project alongside French company Engie.