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Westinghouse Electric Chapter 11 Bankruptcy

30 March 2017

Japan's embattled Toshiba said Wednesday that its US nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection.

Now a unit of Japanese technology giant Toshiba Corp., Westinghouse on Wednesday filed for Chapter 11 bankruptcy-court protection, citing as much as $10 billion in debt.

Both companies stressed that only Westinghouse's U.S. operations would be affected by the filing.

"We reaffirm USG (US government) commitment to civil nuclear cooperation with India", the spokesman added.

The Japanese stock market reported the news in an alert issued this morning.

A Department for Business, Energy & Industrial Strategy spokesperson said: "The UK Government is committed to new nuclear as an important part of our energy mix, having commissioned the first new nuclear power station in a generation at Hinkley Point C".

Toshiba now predicts that full year operating loss could be in the region of ¥1.01 trillion ($9.1 billion) up from the ¥390 billion predicted on February 14.

Southern Co.'s subsidiary Georgia Power, one of the co-owners of the Vogtle reactors, said it has been preparing for a Westinghouse bankruptcy and that it was "working with Westinghouse to maintain momentum at the site".

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A spokesperson for the government of Japan said the governments of Japan and the USA were having discussions related to the issue.

"Basically, Westinghouse has backed out of the contracts in place and will renegotiate contracts with those utilities which will have to bear previous cost overruns on their projects", he said. With the financial meltdown of Westinghouse, Toshiba also recently announced its plans to withdraw from foreign construction projects - a move that has far-reaching implications outside Japan and the USA, such as the construction of three reactors in the United Kingdom at Moorside.

"Lenders are aware that Toshiba wants to file by the end of the month, but if possible would like to see it after the meeting", the source said.

Any filing would trigger complex negotiations between Toshiba, the nuclear unit and creditors, and could embroil the U.S and Japanese governments given the scale of the collapse and US state loan guarantees for new reactors. At the start of the 21st, its AP1000 reactor design - a pressurized-water unit created to be simpler and safer than earlier models - was the pick for the first new American nuclear projects commissioned since the 1970s. The utility's board of directors authorized the spending during a special meeting Monday but did not release details of the plan until the bankruptcy was official.

The Japanese government confirmed on Wednesday that it was aware of Toshiba's plans. After the March 2011 nuclear disaster in Fukushima, public sentiment turned against nuclear power in countries such as Japan and Germany.

Toshiba has opened the door to selling its majority stake in NuGen, which is developing the huge Moorside nuclear power plant scheme near Sellafield. The state's regulators believe Southern has "appropriate levels of parental guarantees from Toshiba" on the project. Construction of all four US AP1000s began in 2013.

Faced with ballooning losses, Toshiba had been considering a way to distance itself from the fallout from the debacle at Westinghouse, which it bought in 2006 to expand its nuclear power business overseas.