Toshiba’s loss-hit US nuclear unit Westinghouse Electric (WEC) has filed for bankruptcy protection, the companies said Wednesday, as the troubled division wrestles with multi-billion losses and accounting fraud claims.
The Japanese conglomerate’s board earlier in the day approved the Chapter 11 filing in a US court, which temporarily shelters struggling firms as they try to restructure their affairs and debts.
“Westinghouse Electric…. and certain of its subsidiaries and affiliates, today filed voluntary petitions under Chapter 11 of the US Bankruptcy Code,” the US firm said in a statement.
“The company is seeking to undertake a strategic restructuring as a result of certain financial and construction challenges.”
Toshiba has previously warned it was facing a writedown topping 700 billion yen ($6.3 billion) at Westinghouse.
The division was once hailed by Toshiba as a future growth driver after 2011 Fukushima atomic accident brought new business in Japan to a screeching halt.
But the US firm has been hit by new project delays and cost overruns while weakening prospects for the nuclear power industry globally have also weighed on its fortunes.
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