Toshiba's Westinghouse plant seeks US bankruptcy financing: Sources

Should it file for bankruptcy, the money would allow Westinghouse to continue to pay employees and build four nuclear power plants in Georgia and South Carolina, sources said.

Published: 21st March 2017 08:51 AM  |   Last Updated: 21st March 2017 08:51 AM   |  A+A-

Reporters raise their hands for a question during a news conference by Toshiba Corp CEO Satoshi Tsunakawa (Photo | Reuters)

Image used for representational purpose only. (File photo | Reuters)

By Reuters

WASHINGTON: Westinghouse Electric Co LLC, the nuclear power plant developer owned by Japanese electronics company Toshiba Corp, is taking offers for a financing package to help it go through U.S. bankruptcy, people familiar with the matter said on Monday.

Toshiba is reviewing proposals from financial institutions and investment firms about a so-called debtor-in-possession loan, which would carry the company through a potential bankruptcy, said two people familiar with the situation. The size of this financing package is expected to exceed $500 million, the people added.

Should it file for bankruptcy, the money would allow Westinghouse to continue to pay employees and build four nuclear power plants in Georgia and South Carolina, commissioned by local utility companies. These would be the first nuclear power plants built in the United States in more than 30 years.

The sources cautioned that the move is preparatory and that no decision has yet been made for Westinghouse to file for bankruptcy. They asked not to be identified because the deliberations are confidential.

Reuters reported earlier this month that Westinghouse was working with bankruptcy attorneys and a turnaround expert.

Toshiba has so far said it was considering several options for Westinghouse, including selling the unit.

Toshiba and Westinghouse did not immediately respond to requests for comment.

Toshiba has said it would take a $6.3 billion writedown related to Westinghouse, and gained an extension from Japanese regulators until April 11 to submit financial results or face having its public shares delisted from the Tokyo Stock Exchange.

The power plants Westinghouse is building are called the Virgil C. Summer Nuclear Generating Station in Fairfield County, South Carolina and the Vogtle Electric Generating Plant in Burke County, Georgia. Scana Corp and Santee Cooper own the plants in South Carolina, and Georgia Power leads a consortium that commissioned the Georgia plants.

"We will continue to hold (Westinghouse) accountable for their responsibilities under our agreement," Georgia Power said in a statement. "Work continues to progress at the Vogtle site, we are monitoring the situation and prepared for any potential outcome."

A spokeswoman for Scana said that "with approximately 5,700 contractor and subcontractor personnel on site today, we continue to make progress with construction of these new units."

In a potential Westinghouse bankruptcy, the utility companies would be among the largest creditors of the developer, owed the work that has yet to be completed and potential penalties, according to the sources.

The exploding population in the southeastern United States spurred the development of the plants, which were first approved by regulators in 2012.

Nuclear power fell out of favour in the United States after a partial nuclear meltdown at Three Mile Island in central Pennsylvania in the late 1970s.

Toshiba's acquisition of Westinghouse about 10 years ago for $5.4 billion represented a major bet on a renaissance of the fuel. But the projects now face long construction delays and billions of dollars in cost overruns.

Stay up to date on all the latest Business news with The New Indian Express App. Download now

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL2018