Toshiba Warns of One-T.-Yen Annual Loss on Westinghouse Bankruptcy

Tokyo, March 29 (Jiji Press)--Toshiba Corp. <6502> said Wednesday its consolidated net loss for the current business year could total 1,010 billion yen, far exceeding its February estimate of 390 billion yen, due to its debt guarantee for U.S. subsidiary Westinghouse Electric Co., which filed for Chapter 11 protection from creditors with the bankruptcy court in New York the same day. Toshiba Nuclear Energy Holdings (UK) Ltd., which owns non-U.S. firms having close ties with Westinghouse, also filed for Chapter 11 protection with the same court. The two subsidiaries left liabilities totaling 9,811 million dollars. Toshiba said it will provide up to 200 million dollars in debt guarantee for an 800-million-dollar stopgap loan Westinghouse aims to secure for its business reconstruction. With the U.S. nuclear plant builder set to be separated from Toshiba's consolidated accounting, the struggling Japanese electronics and machinery giant is now poised to accelerate its exit from overseas nuclear plant operations. "As the first step toward corporate reconstruction, we will shut out risks from overseas nuclear plant operations without fail," Toshiba President Satoshi Tsunakawa told a press conference at the company's head office in Tokyo. "Our nonnuclear operations are recovering smoothly," he added. Toshiba's estimated group loss for the year ending Friday would be the largest on record for any Japanese manufacturer. The current record holder is Hitachi Ltd. <6501>, with 787.3 billion yen logged in the year through March 2009. Toshiba also said it could see a negative net worth of 340 billion yen at the end of the current business year. To escape the situation as soon as possible, Toshiba needs to raise some 2 trillion yen through the sale of its mainstay flash memory business, analysts said. Tsunakawa said the business is worth at least 2 trillion yen and that its value is rising. Toshiba plans to sell its Westinghouse shares after obtaining consent from the U.S. nuclear plant builder's major creditors, such as power firms. But it is expected to experience difficulties finding a buyer, as the nuclear power industry faces a tough business environment. Meanwhile, the U.S. government has expressed concerns over the fate of nuclear power plant projects undertaken by Westinghouse. Japanese Chief Cabinet Secretary Yoshihide Suga told a press conference on Wednesday that Tokyo will keep in close touch with Washington on the matter. END