UPDATE3: Toshiba admits to eyeing Chapter 11 filing by U.S. nuclear unit
Toshiba Corp. said Tuesday that a filing for Chapter 11 bankruptcy protection by its loss-making U.S. nuclear unit Westinghouse Electric Co. is an option, the first time it has admitted to considering such a move.
Toshiba, which revealed massive accounting irregularities in 2015, also said it will sell a majority of the shares in Westinghouse in fiscal 2017 to remove the subsidiary from the group's books and limit further losses, effectively pulling the Japanese technology conglomerate out of the U.S. nuclear business.
With its financial woes deepening, Toshiba pushed back the release of its third-quarter results again Tuesday, a month after missing the initial deadline, due to the need for more time to look into accounting at Westinghouse. The new deadline was set as April 11.
"We have various options but nothing has been decided," Toshiba President Satoshi Tsunakawa told a press conference when asked about the possibility of a Chapter 11 filing by Westinghouse. "We deeply apologize for once again causing trouble," Tsunakawa said in reference to the delayed earnings report.
The potential filing for bankruptcy protection could increase the already huge losses related to Toshiba's nuclear business to more than 1 trillion yen ($8.7 billion), according to sources.
The Tokyo Stock Exchange will put Toshiba shares under supervision from Wednesday. The shares plunged more than 8 percent before closing Tuesday slightly higher, amid uncertainty over whether Toshiba can retain its listing.
Toshiba last month postponed by a month the Feb. 14 release of its financial results for the April to December period, citing the need to launch an investigation after a whistle-blower alleged "inappropriate pressure" at Westinghouse over the purchase of a U.S. nuclear plant construction company.
In February, Toshiba said it was expecting a loss of 712.5 billion yen in its U.S. nuclear business for the nine months through December on an unaudited basis due to plant project delays leading to cost overruns.
It also estimated a group net loss of 390 billion yen for the full year through March 31, a reversal from its previous forecast of a 145 billion yen profit, and said it likely fell into negative net worth of 150 billion yen at the end of the year.
The cash-strapped company has already decided to spin off its prized memory chip business and sell a majority stake or even the whole of the operation to raise funds to bolster its financial standing. Toshiba is also considering seeking several hundred billion yen in additional loans from banks.