Toshiba is splitting itself into four subsidiaries in an effort to protect its other business units from fallout from the bankruptcy of its Westinghouse nuclear power operator, according to media reports.
The four subsidiaries are infrastructure, including water treatment and railways; energy, including thermal and nuclear power; electronics, including data storage; and information and communications.
- The spin-offs would be effected in July, except for the energy subsidiary, which would be spun off in October.
The complex implications of Westinghouse’s bankruptcy last month are still unfolding for the nuclear power sector. But for parent company Toshiba, the consequences are already dire enough that the company is splitting into four subsidiaries to protect its other business units.
The bankruptcy has wreaked havoc on Toshiba’s finances with potential loses in the billions of dollars. Faced with this reality, the company is struggling to stay alive.
Among the immediate concerns facing Toshiba is expiration of construction licenses needed to sell equipment to the power industry. The licenses have to be renewed every five years and require that the company meet equity and capital targets.
Other Toshiba businesses offer power sector products like turbines for gas, hydro and geothermal plants. The spin-offs are designed to protect those businesses from fallout from the Westinghouse bankruptcy, which might otherwise prove a roadblock to pursuing new power sector business.
For the nuclear industry, Westinghouse's bankruptcy could threaten the completion of two ongoing reactor projects in the Southeast and likely dooms any new nuclear builds in the U.S. for the foreseeable future.