Toshiba's main banks ask for Westinghouse bankruptcy filing this month: Nikkei

The Toshiba Corporation logo at the company's headquarters in Tokyo.
The Toshiba Corporation logo at the company's headquarters in Tokyo. PHOTO: AFP

TOKYO (REUTERS) - Toshiba Corp's main lenders are asking it to submit a bankruptcy filing for US nuclear unit Westinghouse Electric Co by the end of this month, the Nikkei business daily reported on Friday (March 24), without citing sources.

Such a move would pile further pressure on the embattled conglomerate to make a quick decision over a Chapter 11 filing after Finance Minister Taro Aso also called for a decision to be made by the end of this month.

Toshiba is grappling with a multibillion dollar financial maelstrom stemming from Westinghouse's ill-fated purchase of a US nuclear power plant construction company in 2015. It has flagged a US$6.3 billion (S$8.83 billion) writedown and is also looking at selling a majority stake in Westinghouse, in addition to the sale of its memory chip unit.

Shares in Toshiba, however, rose 8 per cent in Friday morning trade after Singapore-based fund Effissimo, established by former colleagues of Japan's most famous activist investor, became its largest shareholder with an 8.14 per cent stake.

Separately, the Japanese government said it would conduct rigorous screening of any potential buyer of Toshiba's chip unit based on foreign exchange and trade laws if needed.

"Toshiba's chip business is highly competitive globally and it plays a key role for the nation's employment," Trade Minister Hiroshige Seko said at a media briefing on Friday.

"The seller needs to consider these issues before the buyer is decided if the business is going to be sold to foreigners," he added.

Reuters reported earlier the Japanese government is prepared to block the sale to bidders it deems a risk to national security.