Toshiba To File For Bankruptcy For Westinghouse

Toshiba is contemplating on filing for bankruptcy for its Westinghouse unit. A source privy to the matter reported that the Japanese company will likely file for Chapter 11 protection on Tuesday or even later.

Toshiba will be forced to take such drastic action in its effort curb its losses. According to Fortune, the company is looking at a couple of dates to possibly file for bankruptcy. Aside from the March 28 filing, the company is supposedly also thinking about filing for bankruptcy for Westinghouse on March 31. The bankruptcy filing may or may not include both Japanese and U.S. governments though Westinghouse's U.S. board will be the one to file for Chapter 11. Despite having no need for Toshiba shareholders to give their approval, the company's banks would prefer the filing to take place after the shareholder meeting.

Reuters noted that the failure of Toshiba's U.S. nuclear unit and its impending bankruptcy may be used by Donald Trump to call out Japanese companies on American soil. The huge financial loss forced Toshiba to sell its prized memory chip. It also failed to file earnings on time which could have resulted in the company's delisting. Toshiba also thought of offering a majority stake in the U.S. nuclear unit for sale and now it looks like at least one investor is interested. An activist investor from Singapore, Effissimo Capital Management, now has 8.1 percent stake in Toshiba's shares.

News of a possible bankruptcy erupted in February after Toshiba revealed that it lost $63 billion due to bad investment particularly Westinghouse's foray into U.S. nuclear power stations. The company's chairman of the board, Shigenori Shiga, resigned as a result of the fiasco though he stayed on as an executive of Toshiba. A couple of months later and more bankruptcy rumors are being heard.

© 2021 iTech Post All rights reserved. Do not reproduce without permission.

More from iTechPost