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Toshiba informed its main lenders today it is planning for Westinghouse Electric Co., the nuclear engineering firm overseeing construction of new generating facilities in Georgia and South Carolina, to file for bankruptcy on March 31, according to sources briefed on the matter, Reuters reports.
Reuters also reports exclusively on preparations utilities are making for the potential bankruptcy of Westinghouse.
Toshiba acquired a majority stake in Westinghouse in 2006, but last month was forced to write down $6 billion at the company due to difficulties with its projects. The company is managing construction of new nuclear generation at the Vogtle plant in Georgia and V.C. Summer in South Carolina.
Utilities and other parties are gearing up to deal with the ensuing fallout if Westinghouse files for bankruptcy. According to Reuters, utility clients of Westinghouse have hired advisers in preparation for what could be a protracted financial untangling. Toshiba has reportedly hired a consultancy and law firm to help prepare for anticipated bankruptcy claims.
Both the Vogtle and VC Summer plants are years behind schedule and costs are mounting. While development of those plants will likely continue, there are rumblings that if Westinghouse goes under, it will likely spell the end of new nuclear development for the time being.
MIT Technology Review believes a Westinghouse bankruptcy means an end to new nuclear construction in the United States. The news outlet also reports analysts doubt Toshiba will find a buyer for its stake in Westinghouse, nor any construction partners willing to forge ahead with the nuclear plants it planned to build.
In a recent financial presentation, Toshiba said that it intends to “reduce risk at eight plants currently in progress by thoroughly implementing comprehensive cost reduction measures.” Earlier this year, the company indicated regrets over purchasing Westinghouse.
Exclusive: Westinghouse’s clients gear up for bankruptcy fight – sourcesoffsite link
Toshiba decides on Westinghouse bankruptcy, sees $9 billion in charges: sourcesoffsite link