Investors read Toshiba the riot act over losses

As the bankruptcy filing only affects Westinghouse’s United States operations, the Chinese projects are not expected to be affected. We will continue to take every action available to us to hold Westinghouse and Toshiba accountable for their financial responsibilities under the engineering, procurement and construction (EPC) agreement and the parent guarantee.

The major US utilities that would own the plants, Scana Energy in SC and a consortium in Georgia led by Georgia Power, a unit of Southern Company, are in negotiations with Westinghouse to develop a plan for completing the nuclear power plants. The Associated Press reported that the move by Westinghouse had received approval from Toshiba’s board of directors in Tokyo on Wednesday morning.

These reactors would have been built using Westinghouse Electric’s new AP1000 technology, the same technology that in part, has forced the manufacturer into financial disarray. It said the bankruptcy filing would allow it to separate Westinghouse from the Toshiba group and put a cap on losses.

The company has delayed formally reporting its earnings over the problems at Westinghouse, including whistleblower claims about accounting misconduct by senior executives at the unit.

The nuclear climbdown is not a problem specific to Toshiba.

Toshiba said Westinghouse had total debt of $9.8 billion.

One bright spot is the company’s mainstay flash memory business, which Tsunakawa noted is continuing to rise in value. It could also embroil the United States and Japanese governments, given the scale of the collapse and the $8.3 billion in USA government loan guarantees that were provided to help finance the reactors.

US taxpayers have already financed $6.5 billion in loan guarantees for Southern and its partners that were awarded in 2014 to build the Vogtle plant.

In earlier iterations, Westinghouse, based in Cranberry Township, a suburb of Pittsburgh, was an innovator on par with today’s Microsoft and Apple.

The statement came after SPIC convened a meeting to identify potential risks and to develop precautionary measures, after the Westinghouse bankruptcy filing. Still, the uncertainty surrounding its future has sewn anxiety in both employees and public officials throughout the region.

Westinghouse is Cranberry’s largest employer, with about 2,200 of the company’s 4,500 western Pennsylvania workers stationed at its Cranberry Woods complex.

In contrast, Rosatom is a stable, steadily growing company, doing fine in export markets despite Western attempts to isolate Russian Federation in response to its aggression in Ukraine. In February township manager Jerry Andree called a meeting that included county commissioners, development experts and regional chambers of commerce.

“These are fundamentally strong credits, but that said, they have made a lot of investments in these plants and now there is more uncertainty on how much more it is going to cost or how much longer it will take to complete the plants”, said John Ceffalio, municipal credit analyst at AllianceBernstein in NY. Executives said they would instead focus on maintaining existing reactors – a more stable and reliably profitable business – and developing reactor designs.

Toshiba announced at a news conference on January 27 that the company had made a decision to spin off its semiconductor division and sell off some of the new company’s shares.