Doubts have increased over a proposed £15 billion nuclear plant at Moorside in Cumbria after Toshiba said it could offload Westinghouse, the troubled US nuclear division that is due to make the reactors for the project. The Japanese conglomerate has been plunged into financial crisis after discovering huge liabilities for cost overruns at CB&I Stone & Webster, a nuclear construction business bought by Westinghouse in 2015. Toshiba delayed issuing its third quarter results for the second time yesterday as it continued to investigate the circumstances of the disastrous acquisition, which provisional results published last m onth indicated would result in a $6.3 billion writedown. The company said it was “actively considering” a sale or other strategic options for Westinghouse, in which it has about a 90 per cent stake. Westinghouse is also considering filing for chapter 11 bankruptcy. The South Korean company Kepco is widely regarded as the most likely buyer for Westinghouse. It is also understood to be a potential buyer for a stake in Nugen. Finding an investor such as Kepco that may be willing to continue using Westinghouse’s AP1000 reactor technology would be the best way for the Moorside project to avoid major delays. Westinghouse’s design is close to completing the multi-year safety approval process required by the UK.
Times 15th March 2017 read more »
Toshiba is considering a sale of its troubled US nuclear division Westinghouse as the woes surrounding the business caused the group to miss its own financial reporting deadline for a second time. The company told investors they would need to wait another month for its full-year results as it struggles to value the loss-making nuclear developer. It added that a majority equity stake in Westinghouse could be offloaded as part of a fire sale of assets. Chief executive Satoshi Tsunakawa said there were various options available to battle the financial fallout of its ill-fated 2006 acquisition, but declined to comment directly on whether Westinghouse would file for bankruptcy in the US. South Korea’s Kepco has reportedly said that it would consider an approach by Toshiba but would need to review the overall company. Toshiba has pointed out that 80pc of Westinghouse’s revenues come from stable services such as its fuel business, which could still be an attractive prospect for a would-be buyer.
Telegraph 14th March 2017 read more »
BBC 14th March 2017 read more »
Toshiba Corp is ‘actively considering’ a sale and other strategic options for U.S. nuclear unit Westinghouse, the group said on Tuesday, as it expanded a probe into problems there that caused it to miss an earnings deadline for a second time. The Japanese conglomerate said it believed it could find buyers for a majority stake in Westinghouse despite the potential for future losses as the unit had a stable fuel and services business. But Chief Executive Satoshi Tsunakawa sidestepped questions about a potential Chapter 11 filing for Westinghouse, saying only there were various options. Sources have said bankruptcy lawyers have been hired as an exploratory step. A sale would represent the latest in a series of drastic steps as Toshiba grapples with a multibillion dollar financial maelstrom stemming from Westinghouse’s ill-fated purchase of a U.S. nuclear power plant construction company in 2015. Westinghouse has been plagued by huge cost overruns at two U.S. projects in Georgia and South Carolina and liabilities related to those projects mean it is unlikely to be an easy asset to sell, despite attractive technology. Tsunakawa emphasized that the projects were only a small part of Westinghouse’s business. “Around 80 percent of Westinghouse’s revenues come from stable businesses in services and fuel-related businesses so I think that will be taken into consideration too,” he told a news conference. He added, however, that it was not yet clear yet whether Toshiba would be paid by the buyer or would have to pay the buyer to take Westinghouse off its hands. Toshiba aims to have Westinghouse off its consolidated accounts by the end of the next financial year in March 2018, he said.
Reuters 14th March 2017 read more »
Japanese group must stop pretending it is in a position to choose what it sells. Those who operate nuclear reactors dread the prospect of a chain reaction, where events quickly run beyond their control. Toshiba’s managers face the financial equivalent. On Tuesday, the struggling Japanese conglomerate was granted a second extension for the submission of its third-quarter numbers, and said it will pursue a disposal of the nuclear division responsible for its distress. The shares, which fell as much as 9 per cent at one stage, rallied to end flat. Such relative optimism is unwarranted. True, full separation of the nuclear business would leave the rump of Toshiba looking far healthier. But it is unlikely to happen. Four nuclear plants in China are due to use Westinghouse designs, so a Chinese buyer might be a natural fit. Yet political concerns around Chinese ownership would make it hard to offload the two US contracts responsible for much of Toshiba’s woes, or to win new business. A non-Chinese buyer, such as Korea Electric Power Corporation, is hardly going to be seduced by the $6bn liability arising from cost overruns. If Toshiba’s auditors are unwilling to sign off its accounts, that liability may grow.
FT 15th March 2017 read more »