Toshiba’s bankrupt nuclear arm may be prevented from providing any emergency funds to its overseas interests, throwing the future of the Moorside nuclear plant in Cumbria into fresh doubt. It has emerged that Westinghouse, the Toshiba-owned American nuclear reactor developer, faces orders not to prop up any joint venture agreements that it entered into before the company filed for Chapter 11 bankruptcy in March. Wall Street private equity giant Apollo has pledged an $800m (£617m)rescue loan to the Pennsylvania-based company, which is awaiting court approval, while a group of hedge funds is also interested in providing emergency financing. However, it is understood that many of these prospective new investors want to see any fresh funds funnelled into Westinghouse and its main subsidiaries, not foreign joint venture projects like Moorside. They are calling for partners involved in Toshiba’s overseas interests to also step in and provide support.
Telegraph 6th May 2017 read more »
Problems with two American projects have put Toshiba in a precarious financial position, forcing the proud technology giant to sell off chunks of its empire. The crisis has also thrown Britain’s nuclear renaissance into turmoil. Toshiba is unable to proceed with a £15bn-plus power station at Moorside in Cumbria, which the government is relying on to power 6m homes. Coming so soon after an accounting scandal that rocked Toshiba in 2015, the ructions at Westinghouse have shattered remaining confidence in the company’s management and governance. In a blow to Britain’s hopes of building a fleet of nuclear power stations, Toshiba is seeking a buyer for its NuGen scheme in Cumbria. Bidders are scarce and the sale is fraught with complexity. The source of Toshiba’s malaise is the decision — a decade ago — to transform itself into a global force in nuclear energy. The acquisition of Westinghouse from state-owned British Nuclear Fuels (BNFL) was done amid the feverish climate of the pre-credit crisis boom. Westinghouse has two contracts to install pressurised water reactors at existing nuclear power stations in Georgia and South Carolina, signed in 2008 — America’s first nuclear reactors in a generation. The plants are years late and an estimated $10bn (£7.7bn) over budget, with no certainty about completion. After Fukushima, Toshiba was forced to enhance safety procedures at the two plants, at vast expense. The Japanese giant has, in effect, been left on the hook for unlimited costs. It has booked $6.3bn of write-downs on the Westinghouse subsidiary — and has warned that there is now doubt over Toshiba’s status as a going concern. Korean nuclear giant Kepco is the most likely suitor for NuGen, but wants to use its own reactors rather than Westinghouse’s. A sale of the American company would be highly contentious, given its strategic importance. If a buyer cannot be found, or bankruptcy does not sever the liabilities on the American projects, all the uncapped costs could stay with the Japanese company. “Toshiba could end up as just a holding company for Westinghouse,” said one industry source. That would be the nightmare scenario for its investors — and a hammer blow to Britain’s energy strategy.
Times 7th May 2017 read more »