March 27, 2017 - 11:25 AMT
PanARMENIAN.Net - Westinghouse Electric Co, the U.S. nuclear unit of Japan's Toshiba Corp, could file for bankruptcy protection as early as Tuesday, March 28, and is seeking support from South Korea's Korea Electric Power Corp, the Nikkei said on Monday.
A Chapter 11 filing could help Toshiba limit damage from losses at Westinghouse, the report by the Japanese business daily said, without citing sources for its information, Reuters says.
Sources told Reuters on Friday that Toshiba had told its main banks it planned to have Westinghouse file for bankruptcy on Friday, expanding charges related to the U.S. unit this business year to about 1 trillion yen ($9 billion) from its publicly flagged estimate of 712.5 billion yen.
Nikkei said the Westinghouse board would meet as early as Tuesday to decide on a Chapter 11 petition, which it could file the same day. It said the U.S. firm had asked Korea Electric Power Corp, also known as Kepco, to be its sponsor in its bankruptcy reorganization.
Shares in Toshiba rose 4 percent immediately after the market opened, before falling into negative territory.
A Chapter 11 filing "raises the chance for Toshiba to eliminate risks from its overseas nuclear business," Takeshi Tanaka, an analyst at Mizuho Securities, said in a report.
"But it doesn't change our view that it would take a long time for Toshiba to rebuild trust in light of the many tasks that it must tackle."
Toshiba said it was not appropriate to comment prematurely.
"Whether or not Westinghouse files for Chapter 11 is ultimately a decision for its board, and must take into account the various interests of all of its stakeholders, including Toshiba and its creditors," it said in a statement.
Officials answering Kepco's phone said they had no information on the report, referring questions to the press office, which could not be reached outside office hours.