News Mar 15, 2017 07:11 AM EDT

Toshiba looking to sell controlling stake in Westinghouse Unit

By April Kirstin Chua

Toshiba is actively considering to sell its US nuclear unit in Westinghouse according to a statement the group released on Tuesday. This is part of its probing of the problems in Westinghouse that has missed an earnings deadline for the second time around.

The Japanese company believes that it could find buyers for a majority stake in Westinghouse, amid potential future loss, due to the unit's stable fuel and services business. Toshiba president Satoshi Tsunakawa sidesteps questions for a Chapter 11 filing for Westinghouse and says there are various options. Sources claim that bankruptcy lawyers have already been hired for further actions.

In February, Toshiba saw the resignation of its chairman after the company delayed publishing the results over disagreements of its auditors. Last month, Toshiba announced a $6.3 billion devaluation because some of its US nuclear assets were determined as worth less than estimated. Analysts have claimed that the company's future may be at risk.

Toshiba's Westinghouse unit has been plagued by huge cost overruns at two US projects in Georgia and South Carolina, which means that it is unlikely to be an easy asset to sell. Tsunakawa emphasizes that the projects were only a small part of Westinghouse and that most of its revenues come from stable businesses. "Around 80 percent of Westinghouse's revenues come from stable businesses in services and fuel-related businesses so I think that will be taken into consideration too," he said in a news conference.

While it is true that most of the revenues of Toshiba come from its nuclear services businesses, that side has not made a profit since 2013 altogether with other nuclear services since the Fukushima disaster in 2011. Toshiba had announced to its investors last December that it faced a heavy loss linked to a deal done by Westinghouse. Meanwhile, after news of the sale, Toshiba shares dipped in Tokyo with as much as 8.1 percent.

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