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Toshiba's Westinghouse should decide on Chapter 11 by end-March, says govt
[TOKYO] Toshiba Corp's Westinghouse unit needs to decide by the end of the month whether to file for Chapter 11 bankruptcy so the Japanese conglomerate can compile audited third-quarter earnings without further delays, Japan's Finance Minister said on Friday.
Toshiba has a March 14 deadline to publish the earnings after postponing their release a month ago so that it could probe potential problems at Westinghouse further. If it misses that date, it has eight working days to March 27 to file the report or face a possible delisting from the Tokyo bourse. "On the U.S. side, they have to decide about (whether to file for) Chapter 11 quickly and until they do that, it seems it is difficult for them to file their earnings," Finance Minister Taro Aso told a regular post-cabinet briefing on Friday.
People familiar with the matter have told Reuters that Westinghouse, which has been hit by huge cost overruns at two U.S. projects, had brought in law firm Weil Gotshal & Manges LLP as an exploratory step, but had not yet taken a decision on a bankruptcy filing.
Mr Aso's decision to weigh in on Toshiba's troubles adds government pressure on the company to act swiftly to resolve its financial problems.
The likelihood of Toshiba meeting its March 14 deadline was'fifty-fifty' as Westinghouse auditors and lawyers were fussing over details, a source with knowledge of the matter has said.
Japanese Trade Minister Hiroshige Seko said this week that a Chapter 11 filing would not necessarily be a negative step and that Westinghouse was one topic that he may discuss with U.S. officials when he visits in the near future.
The pressure to meet the deadline comes as Toshiba is pushing forward with the sale of most or even all of its prized flash memory chip business, as it seeks to plug not only an upcoming $6.3 billion writedown for Westinghouse but also to create a buffer against future financial problems.
Toshiba shares were 1 per cent higher in morning trade, in line with the broader market.