Firm pledges “strategic restructuring” over problems connected with nuclear power projects
Nuclear business Westinghouse has announced it has filed for bankruptcy protection to seek time to restructure the business following “financial and construction challenges” with some of its North American nuclear power projects.
Westinghouse Electric Company is owned by Japanese conglomerate Toshiba and its bid, filed in New York, names Toshiba Nuclear Energy Holdings (UK) Limited among the subsidiaries for which it is seeking bankruptcy protection under Chapter 11 of the US Bankruptcy Code.
Toshiba is the backer of the £10bn planned Moorside nuclear plant in Cumbria, and last month revealed a £5.1bn write-down on Westinghouse at the same time as announcing it would not be “carrying out actual construction” on Moorside.
In a statement accompanying its Chapter 11 protection move, Westinghouse said its operations in its Asia and Europe, the Middle East and Africa regions were not impacted.
Moorside developer NuGen, which is owned by Toshiba and Engie, said it was continuing to work with its shareholders and Westinghouse on the project to deliver three AP 1000 reactors.
“NuGen will continue in a ‘business as usual’ manner working in collaboration to gain the appropriate permits and licences required to construct Europe’s largest nuclear new build project, and will continue to increase value and attractiveness of the project to potential future investors, as we have always done,” it said.
However it said it could not comment on “specific financial issues relating directly to Toshiba or Westinghouse”.
The heart of Westinghouse’s problems stem from two projects with its AP1000 reactors in Georgia and South Carolina.
It said today that it had reached an agreement with each owner of the AP1000 projects that would see them continue “during an initial assessment period”.
It added: “Westinghouse remains committed to its AP1000 technology as the industry’s premier Gen III+ nuclear power plant design, and will continue its existing projects in China as well as pursuit of other potential projects in the future.”
A statement from Toshiba said the Chapter 11 protection would allow the owners of the troubled AP 1000 facilities to continue making payments for construction costs on the project “while the parties continue to explore and assess a comprehensive solution regarding the sites”.
Westinghouse said it had arranged $800m in debtor-in-possession financing from a third-party lender to help fund and protect its core businesses during its reorganisation.
Interim president and chief executive officer José Emeterio said seeking Chapter 11 protection would put the business “on a path” to resolving the problems with its AP 1000 projects
“We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader,” he said.
Toshiba said Westinghouse’s core debts, including those of TNEH (UK), were $9.8bn as of December 31 last year.