TOKYO -- Embattled Japanese conglomerate Toshiba on Wednesday said it could post a net loss of just over 1 trillion yen ($9 billion) for fiscal 2016, now that Westinghouse Electric, its American nuclear unit, has filed for bankruptcy protection.

At a news conference earlier in the day, Japan's Chief Cabinet Secretary Yoshihide Suga said that "both the governments of Japan and the U.S. are cooperating closely" on Westinghouse's Chapter 11 filing, after some media had quoted a senior U.S. government official raising national security concerns over the move.
Westinghouse's acquisition of a nuclear construction services company in late 2015 led to huge cost overruns and other problems that proved too much to bear. The Chapter 11 filing will take Westinghouse off Toshiba's consolidated books, and is likely to shrink significantly the 712.5 billion yen loss the parent had been expected to book in connection with Westinghouse's acquisition.
But Toshiba said that if it accounts for the 650 billion yen worth of Westinghouse debt it has guaranteed to cover in full -- as well as 175.6 billion yen to be potentially set aside for bad debts -- it now sees its loss for the year through March possibly widening by 620 billion yen, to 1 trillion yen.
That would be the biggest net loss in its 140-year history.

The Westinghouse filing is unlikely to prevent Toshiba from ending fiscal 2016 in negative net worth. Toshiba is bracing for this by preparing to sell majority stakes in its semiconductor business, as well as lining up several hundred billion yen in loans from a bank syndicate.
Shares in Toshiba ended Wednesday up 1% at 219.40 yen. The stock had fallen in early trading but jumped on the news of Toshiba's approval, at one point rising as much as 2% on the day, to 221.60 yen.
Toshiba bought a 77% stake in Westinghouse in 2006 from British nuclear energy and fuels company BNFL for 490 billion yen. It later raised its interest to 87%.
Even after the March 2011 meltdowns at the Fukushima Dai-ichi nuclear power plant in Japan, as well as an accounting scandal in 2015 and subsequent restructuring measures, Toshiba continued to see the nuclear business as the core of its rebuilding strategy. It hoped to use Westinghouse's cutting-edge technology to win new international orders.
But Westinghouse's nuclear construction operations have been mired in the red, suffering from project delays tied to tighter regulations. While its nuclear fuel and nuclear-related services businesses are robust, it incurred huge losses on its acquisition of nuclear construction services company CB&I Stone & Webster. The U.S. nuclear woes ultimately threw Toshiba into crisis.
Westinghouse has asked the Korea Electric Power group to sponsor its recovery.