Following huge losses in its nuclear power division and as a way to ‘support maximisation of … business value’ Toshiba Corp, parent of Westinghouse Electric, is to split itself into four wholly owned subsidiaries by the end of the year. The split will see its nuclear energy unit being combined with its energy business. Toshiba had hoped that finding a buyer for its profitable memory chip division would sufficiently offset its losses but that hope has not yet been realised. 
Company shares rose 1.1% on the stock exchange in Japan as Toshiba announced its intentions, finishing the day higher by 0.39%. On the year, Toshiba shares have fallen more than 26%.
Toshiba suffered losses of $4.8 billion through the first three quarters of the 2016 fiscal year, including its Westinghouse losses, a major part being ‘several billion’ lost through Westinghouse's 2015 purchase of nuclear plant construction firm CBI Stone & Webster.
Westinghouse filed for Chapter 11 bankruptcy protection on March 29 in a move that could affect the company's four domestic nuclear power plant projects, including the Plant Vogtle expansion project in Georgia and the VC Summer expansion project in South Carolina. Both projects are based on Westinghouse AP1000 reactors. An additional four AP1000 reactors are currently under construction in China.
Creating the new subsidiaries will take place in two steps. On 1 July, Toshiba will create subsidiaries called Infrastructure System, Storage & Electronic Devices and Industrial Information and Communication Technology. 
The company needs to create the four business units in order to fulfil requirements to get its licence renewed for big construction projects, for which rules apply on how much capital or shareholder equity a company must have. Toshiba president Satoshi Tsunakawa has previously said he is likely to use the spin-offs to help the company renew its licence as a special construction business. 
From 1 October, the company will transfer its Energy Systems and Nuclear Energy Systems units – both of which are currently in-house companies – into a newly established independent entity. The process of division, says Toshiba, ‘will further enhance collaboration between the split-off companies, and, at the same time, aim to maximise the value of each business.’ The reshuffle ‘will establish an optimised structure for ensuring business continuity in respect of maintaining special construction business licences required to do business in Japan.’ The company also promised that following the split it would ‘further concentrate’ on maximising the group’s overall value and strengthening corporate governance.