Early this year, Toshiba made the strategic decision to divest from its Westinghouse nuclear power generator in America. Now, the Chinese company has decided that splitting into subsidiaries is the only way to protect its other businesses.

The four subsidiaries will be (1) infrastructure (including water treatment and railways); (2) energy (including thermal and nuclear power); (3) electronics (including data storage); (4) information and communications.

With the exception of the new energy subsidiary, the rest of the spin-offs would come into being in July 2017. Energy is set to be in effect in October.

The significant of the bankruptcy of Westinghouse is still unclear – many are concerned that the shutdown will have an effect on the nuclear power sector. As the four new subsidiaries demonstrate, the ramifications of this bankruptcy are clearly having their way with Toshiba.

On the eve of the imminent bankruptcy, Moody’s Investors Service changed their outlook on all five utility companies involved in the project. Each was given a negative outlook.

The measures taken by Moody’s apply to the Vogtle entities. That is, Georgia Power, Oglethorpe Power and the Municipal Electric Authority of Georgia. Also included are the entities of the Summer project. Specifically, SCANA Corp. and the South Carolina Electric and Gas Subsidiary, as well as to the South Caroline Public Service Authority.

Moody’s justifies the new outlook as being reflective of the increased credit and regulatory risk that will be a result of the bankruptcy. The depleted financial condition of Toshiba contributes to this risk. In February, the company took a $6.3 billion write-down associated with Westinghouse’s overrun costs at the two nuclear projects in America.

Now, the bankruptcy has left Toshiba with what can amount to billions of dollars in potential losses. This presents serious struggles for the nearly 150 year old conglomerate. After the bankruptcy was announced, Toshiba shares in Tokyo stumbled nearly 4%. Moreover, losses from last year left the company with $2.1 billion of negative shareholder equity, which threatens its position on the Tokyo Stock Exchange.

More immediate concerns for the company include the expiration of construction licenses, which are needed to sell equipment to the power industry. Unfortunately, the licenses have to be renewed every five years, but require that the company meet certain equity and capital targets. Toshiba’s weakened state jeopardizes the renewal process.

Some of Toshiba’s other revenue streams offer products such as turbines for gas, hydro, and geothermal plants. These power sector products are important to the company, and so the decision to create the subsidiaries is largely to protect those businesses from the potential fall out regarding the Westinghouse bankruptcy. Otherwise, the bankruptcy might end up being a roadblock to engaging in the power sector further.

With regards to the nuclear industry, the bankruptcy has the potential to threaten the completion of two current reactor projects in progress in the Southeast. Further, there is practically zero change that any new nuclear facility in the U.S. will be built in the foreseeable future.

Simply put, nuclear facilities are no longer cost effective. They were intended as an alternative to dirty  fossil fuels and expensive green energy, but neither of those are as problematic as they used to be. It seems as if the industry has no prospects left.