A Toshiba company spokesman confirmed the company was seeking a partner to support its majority stake in its U.S. nuclear power subsidiary Westinghouse Electric Company, but underplayed its connection to an accounting scandal in which Toshiba overstated profits.
Spokesman Hirokazu Tsukimoto said Toshiba has been looking for a partner for Westinghouse “for some time,” adding the company’s position had not changed recently.
Media reports say the accounting scandal is forcing Toshiba’s hand. The company is seeking to raise $1.7 billion, which is slightly more than the highest estimates of the overstated profits. The company has acknowledged that it overstated profits by $450 million in the five fiscal years ending March 2014. But new estimates have the overstated profits potentially rising to $1.63 billion.
Toshiba paid $5.27 billion for Westinghouse shares in 2006 to shore up its nuclear power business in Japan, which looked promising with close to 50 reactors in commercial operations prior to the Fukushima Daiichi meltdowns in 2011.
Just prior to the triple meltdown at the Fukushima Daiichi facility, the result of an earthquake and tsunami event, nuclear power accounted for 30 percent of Japan's electricity production. Plans at the time called for increasing nuclear power to 50 percent of the country’s electricity generation by 2030, according to the World Nuclear Association.
Toshiba added another 20 percent stake in Westinghouse with a $1.02 billion purchase in 2013, increasing its share to 87 percent of the historic company based in Cranberry Township, Pa.
Media reports also say that the accounting scandal will likely result in the resignation of Vice Chairman of Toshiba Norio Sasaki, who was president of the company from 2009 to 2013.