Nuclear giant Westinghouse going bankrupt, parent company Toshiba may not survive fallout

[Arkain2K]

Westinghouse Electric is filing for bankruptcy
by Sherisse Pham | March 29, 2017

A nuclear power plant that Westinghouse is building in Georgia.
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Westinghouse, which was bought by Toshiba in 2006, has suffered billions of dollars in losses due to delays and cost overruns at nuclear plants under construction in Georgia and South Carolina.

The bankruptcy filing is the latest embarrassment for the two industrial giants. Huge losses at Westinghouse have thrown its survival into doubt and raised questions about the future of the two U.S. nuclear power projects.

The financial disaster has spread to the Japanese firm, which last month wrote down the value of Westinghouse by 712.5 billion yen ($6.4 billion).

Toshiba (TOSBF) said the Chapter 11 bankruptcy filing will limit its exposure to future losses at Westinghouse. The U.S. company will no longer be under Toshiba's control and will be stripped out of its financial results, the Japanese conglomerate said.

Toshiba warns net loss could hit $1 trillion

"The environment of nuclear power is so severe at this moment, it was not a sustainable business," said Kazunori Ito, an equity analyst at Morning Star.

Westinghouse's bankruptcy filing "is the only way for Toshiba to limit or determine the amount of loss at this point," he said.

That loss is going to be huge.

Dumping Westinghouse could drag Toshiba to a net loss of about 1 trillion yen ($9 billion) for the financial year ending this month, the Japanese company said Wednesday, nearly three times the 390 billion yen ($3.5 billion) loss it had flagged last month.

Westinghouse and Toshiba are working with the owners of the two U.S. nuclear power projects to come up with plans to continue construction "during an interim period," the Japanese firm said. It wasn't immediately clear what will happen to the unfinished projects in the long term.

Toshiba first warned of a massive hit from its U.S. nuclear unit back in December.

Since that news emerged, the company has twice delayed its audited earnings, and its shares have more than halved in value.

Toshiba and Westinghouse, storied companies now struggling to survive

Westinghouse is what is left today of what was once a major industrial conglomerate that helped change the world during the late 19th and early 20th centuries.

Founder George Westinghouse, a prolific inventor, started making air brakes which greatly improved the safety of train travel and freight transportation. He was a key advocate of the alternating electrical current that is still used around the globe today, rather than the direct current which had been pioneered by Thomas Edison.

Toshiba is an iconic Japanese company that now faces the threat of being delisted from the Tokyo Stock Exchange because of its delay in publishing earnings and a $1.2 billion accounting scandal that was uncovered in 2015.

To help shore up its finances, Toshiba is looking to sell a significant stake in its prized memory chips business.

It's a humiliating fall from grace for a company that has been around since the 1870s. Toshiba manufactured Japan's first light bulb and gave the country its first electric washing machines, vacuum cleaners and microwave ovens.

Toshiba then charged into the tech industry, making a global name for itself as a pioneer laptop maker and developer of flash memory technology.

A nuclear bet gone sour

The company bet big on the nuclear industry in 2006, acquiring Westinghouse for $5.4 billion. It was a bold deal that came at a time of renewed interest in nuclear power.

But the meltdown at Japan's Fukushima Daiichi nuclear power plant in 2011 changed things. In the face of souring public opinion on nuclear energy and stricter safety requirements, hopes of a nuclear renaissance soon faded.

Analysts said Toshiba paid too much for Westinghouse, forcing it to maintain an aggressive nuclear power plant sales forecast. That led to Westinghouse acquiring nuclear construction business CB&I Stone & Webster in 2015.

The deal was supposed to help Westinghouse complete the U.S. reactor projects. Instead, costs spiraled out of control. Toshiba later admitted that it may have overestimated the value of CB&I Stone & Webster.

http://money.cnn.com/2017/03/29/investing/westinghouse-nuclear-bankruptcy-toshiba/index.html?iid=EL

 

[Arkain2K]

Toshiba warns it may not survive crisis
by Sherisse Pham | April 11, 2017

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The Japanese conglomerate said Tuesday that there is "substantial doubt" about its ability to continue as a going concern after it reported huge losses.

Toshiba has been hammered by the collapse of its American nuclear business, Westinghouse Electric, which filed for bankruptcy protection in the U.S. last month.

After twice missing deadlines, Toshiba (TOSBF) reported a net loss of 648 billion yen ($5.9 billion) for the quarter ended in December. But in an unprecedented move for a major Japanese company, Toshiba filed the report without the approval of its auditors.

Japanese regulators must now decide whether to accept Toshiba's earnings report. If not, shares in the ailing company could be delisted from the Tokyo Stock Exchange.

Here's where things stand:


Delayed earnings and delisting threat

The refusal by auditor PwC Aarata to give its seal of approval is another embarrassing blow for Toshiba as it tries to persuade investors that it can find a way out of its crisis.

Westinghouse suffered billions of dollars in losses due to cost overruns and construction delays at nuclear plant projects in Georgia and South Carolina.

The unit's bankruptcy means Toshiba will eventually be able to remove it from its accounts. But dumping Westinghouse could drag Toshiba to a net loss of 1 trillion yen ($9 billion) for the fiscal year that ended in March.

PwC refused to sign off on the earnings report because it is still studying the results of investigations into Westinghouse's takeover of nuclear construction company CB&I Stone & Webster in 2015, Toshiba said Tuesday.

But the company says it has no reason to believe that losses tied to Westinghouse will have any financial impact beyond fiscal year 2016. Toshiba CEO Satoshi Tsunakawa said he considers the investigation to be over.

Regulators in Japan will have to decide if the disarray means Toshiba, one of the country's best known multinational corporations, should suffer the humiliation of having its shares taken off the stock exchange.

Selling off the crown jewels

To try to repair its balance sheet, Toshiba is now selling a majority stake in its prized computer chip business. Tsunakawa has said he expects the unit to fetch at least 2 trillion yen ($18 billion).

Taiwan-based Foxconn, one of Apple (AAPL, Tech30)'s biggest suppliers, has offered as much as 3 trillion yen ($27 billion), according to The Wall Street Journal and Bloomberg. Toshiba declined to comment on the reports, and Foxconn didn't respond to a request for comment.

But the Japanese government is keen to keep the memory chip business in the country, according to local media, and has called on Japanese companies to club together to buy a stake.

Toshiba said Tuesday that the sale of the chip business and other assets would enable it to stay financially sound.

What happens to Westinghouse?

Westinghouse's bankruptcy filing has raised questions about what will happen to the storied U.S. company.

Toshiba's majority stake in Westinghouse will be sold. That will happen under the supervision of the bankruptcy court "and we will not be involved in that," Tsunakawa told reporters last month.

The sale process could fuel concerns in the U.S. government, which reportedly wants to ensure domestic nuclear capabilities don't end up being bought by a Chinese firm.

Westinghouse is already building reactors in China. Buying the struggling American company could provide China with technology it needs to become a leading player in nuclear power.

http://money.cnn.com/2017/04/11/investing/toshiba-earnings-delisting-westinghouse-crisis/

 

[HomerThompson]

Oof.

 

[Boost6]

Japan gov cant allow Toshiba to go down, bail out should happen.

The domestic jobs losses would hurt then badly.

 

[touchedbyjab]

They dun goof'd

 

[Unsurprised Diaz]

They should start to require rich people to pay for all these bailouts. It might work if they don't call it 'taxes'.

 

[reveler]

only one possible outcome for toshiba

 

[HomerThompson]

They should start to require rich people to pay for all these bailouts. It might work if they don't call it 'taxes'.

Temporary refund adjustment.

 

[7437]

Not surere this is really a political thing.

 

[Arkain2K]

Japan gov cant allow Toshiba to go down, bail out should happen.

The domestic jobs losses would hurt then badly.

My concern is that the Chinese gonna swoop in and buy Westinghouse from Toshiba.

Our nuclear-powered Navy vessels (including the fleet of Nimitz-class supercarriers) runs on Westinghouse reactors.

 

[JudoThrowFiasco]

My concern is that the Chinese gonna swoop in and buy Westinghouse from Toshiba.

Our nuclear-powered Navy vessels runs on Westinghouse reactors.

Are you worried that schematics will be acquired or future repair maintenance issues?

 

[Rozko]

Are you worried that schematics will be acquired or future repair maintenance issues?

Both

 

[JudoThrowFiasco]

Both

Plenty of engineers states side that can do any upgrade or repair.

Schematics are easily obtained. Shit, Westinghouse provide NK their reactors

 

[Brampton_Boy]

Damn, Westinghosue made some kick ass budget televisions (seriously).

Why a nuclear/electrical company dabbles in low end electronics is anyone's guess, but GE seems to be comfortable doing the same thing.

 

[Quipling]

Not surere this is really a political thing.

eh, beats another thread about why <group> is subhuman.

 

[Pwent]

=(

i would love for nuclear to do better, if people actually care about clean energy, nuclear is a very viable option

 

[Orgasmo]

Here is my prediction for the next decade for both companies. China buys Westinghouse and suddenly becomes the world's most important player in advancement of nuclear energy. Toshiba survives, but becomes a shell of its former self that eventually withers away in two decades.

 

[Pwent]

Here is my prediction for the next decade for both companies. China buys Westinghouse and suddenly becomes the world's most important player in advancement of nuclear energy. Toshiba survives, but becomes a shell of its former self that eventually withers away in two decades.

japan hates china too much. the government is crazy interconnected with all the large corporations, as well as different corporations with each other. their government would not sell nuclear energy to china

 

[Orgasmo]

japan hates china too much. the government is crazy interconnected with all the large corporations, as well as different corporations with each other. their government would not sell nuclear energy to china

Japan may hate China, but they're buried up to their neck in debt already. China already owns the right to much of Westinghouse's intellectual property for commericial reactor(AP1000). It is also the only player in the game with enough cash on hand to take over. They won't buy Westinghouse in the short term, but likely will wait until both Westinghouse and Toshiba are near death before making a move.

 

[HIMBOB]

=(

i would love for nuclear to do better, if people actually care about clean energy, nuclear is a very viable option

10000 years storage for waste is hard to forecast for when legislation could change.