US nuclear products and services company Westinghouse Electric Co. (WEC) has today officially filed for Chapter 11 Bankruptcy protection.
The company, owned by Japanese industrial giant Toshiba announced the bankruptcy following massive losses incurred in several nuclear projects in the US.
Late last year the company had alerted investors to the fact that it had overvalued some of its US assets to the tune of several billion dollars, however the scale of this was at the time unconfirmed.
Today parent company Toshiba, in the bankruptcy filing, confirmed that WEC had incurred a net loss of over 1 trillion yen ($9.1bn), a sum significantly higher than previous estimates.
Toshiba, which itself operates many nuclear plants in Japan, originally acquired Westinghouse in 2006. Since the Fukushima disaster, though, there had been greater pressure on nuclear operators to increase their safety standards, something which massively increased the cost of their operations.
Toshiba concluded upon determining the scale of the losses related to the US nuclear operations that it had no choice but to file for bankruptcy in order to protect the larger company from the fallout.
Despite this, Toshiba is remaining upbeat about the situation hoping that it will be able to survive as a company into the future.
“We want to make this our first step toward recovering our solid business,” Toshiba President Satoshi Tsunakawa reportedly said in an announcement to journalists.
Beyond the US, WEC operates a number of nuclear plants in Europe, however, these are likely to be unaffected by the bankruptcy due to emergency funds Toshiba has managed to raise.
UK plant project in disarray
While day-to-day plant operations are unlikely to be affected, Toshiba held a 60% stake in NuGen, a joint venture tasked with building the new Moorside nuclear power plant in Cumbria, UK.
Within this contract, WEC was tasked with building the reactors which form one of the most critical components of the plant.
Given this, the bankruptcy of WEC, and any knock-on effects this has for Toshiba could throw the entire project into doubt.
GMB, a union for nuclear workers called on the UK government to provide reassurance that the plant would continue despite these problems.
“It is vital that this project is given the certainty it needs and therefore we are calling on an urgent government announcement to give clear and unambiguous clarity for the short, medium and long-term future of Moorside,” said GMB senior organizer Chris Jukes.
Moorside would potentially provide up to 7% of the UK’s energy needs upon completion.