TOKYO—Toshiba Corp.’s business partners are preparing for a scenario in which the company seeks to reorganize under Japanese bankruptcy laws, with consequences for the global nuclear-power and electronics industries.
Toshiba TOSYY, -0.93% last month expressed “substantial doubt” about its “ability to continue as a going concern.” The company said it expected to record a net loss of some ¥1 trillion ($8.83 billion) for the year ended March 2017 following the chapter 11 bankruptcy filing by Toshiba’s U.S. nuclear unit, Westinghouse Electric Co.
Atlanta-based utility Southern Co., which hired Westinghouse to build two nuclear reactors in Georgia, is concerned that Toshiba will apply for protection from creditors and relieve itself of the guarantees made on Westinghouse’s behalf, said people familiar with Southern’s thinking. Toshiba says it doesn’t plan to.
Southern Chief Executive Thomas A. Fanning said in an interview May 3 that the utility is owed $3.7 billion by Toshiba and wants to be paid whether or not the reactors are built.
A Toshiba spokeswoman declined to comment on Mr. Fanning’s statements. The company has said that it guaranteed some $6 billion in obligations incurred by Westinghouse when it promised to complete the reactors.
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