TOKYO -- Toshiba said Friday its nuclear power unit, Westinghouse Electric, will move toward rehabilitation under U.S. bankruptcy procedures.
The comment followed the announcement that Canadian investment fund Brookfield Business Partners plans to purchase Westinghouse for $4.6 billion.
While Westinghouse, which collapsed in March 2017, will seek rehabilitation under the fund's direction, Toshiba will try to recover from its own massive losses by cutting its former subsidiary loose.
BBP is an investment fund operating under the wing of Brookfield Asset Management, a Toronto-based global investment group.
BAM, which has $265 billion in assets under management, is an active investor in real estate, energy and infrastructure. BBP focuses on areas where high barriers to entry lessen price-cutting pressures. The number of companies involved in the nuclear business is limited, as it is technically complex and requires specialized know-how in the handling of nuclear fuel.
BBP believes it can sharply raise the corporate value of Westinghouse because bankruptcy will cut the company's liabilities. It also expects to benefit from future tax exemptions.
Toshiba formally holds all Westinghouse shares. But because Westinghouse has filed for Chapter 11 bankruptcy protection, it is not treated as Toshiba's consolidated subsidiary.