A reactor construction project already years behind and over-budget is facing more bumps in the road after Westinghouse, the contractor slated to build the reactors, filed for Chapter 11 bankruptcy protection.
Toshiba's Westinghouse Electric (WE) US nuclear division, which was set to provide the reactors for a new power plant in the United Kingdom, has filed for bankruptcy protection from creditors.
NuGen, a joint venture between Toshiba and French utility Engie has also come under doubt since Japan's Toshiba said last month it planned to pull out of the construction work at the British plant after posting a $6.3 billion writedown on Westinghouse, which has been hit by billions of dollars in cost overruns at new nuclear plants. "With the financial meltdown of Westinghouse, Toshiba also recently announced its plans to withdraw from foreign construction projects-a move that has far-reaching implications outside Japan and the US, such as the construction of three reactors in the U.K.at Moorside". Toshiba said Westinghouse had racked up debt of $9.8 billion.
Westinghouse said it has secured $US800 million in financing to fund and protect its core businesses during its reorganisation.
Toshiba said it had guaranteed $200 million of Westinghouse's bankruptcy financing, but it expects the division to be removed from its financial results following the bankruptcy. The U.S. company will no longer be under Toshiba's control and will be stripped out of its financial results, the Japanese conglomerate said.
Westinghouse is the manufacturer of 111 of the 450 operable nuclear reactors worldwide, according to court documents filed at Southern New York's federal bankruptcy court.
"It is clear that Fluor and Westinghouse are taking steps to protect their financial interests but it does not appear that anyone in authority is looking out for the electricity customers in SC and Georgia", said Leslie Minerd, founder and honorary president of SCAMA.
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A Westinghouse bankruptcy filing should help limit future losses for Toshiba.
Tsunakawa said offers received so far for the unit are likely to allow the company to avoid falling into negative shareholder equity.
Chris Jukes GMB senior organiser said: "Westinghouse is to build the reactors for the new plant".
"Since December 2016, WE and Toshiba have been working to determine the scale of the possible loss, investigate the causes and to implement preventive measures and actions", the company said. The bankruptcy will affect the costs paid by the taxpayers in the USA for the two nuclear projects in South Caroline and Georgia. Instead, Westinghouse has saddled the Japanese company with mounting losses.
But Westinghouse's nuclear construction operations have been mired in the red, suffering from project delays tied to tighter regulations.
Toshiba's $5.4 billion purchase of Westinghouse in 2006 may have seemed promising at the time.
Toshiba is an iconic Japanese company that now faces the threat of being delisted from the Tokyo Stock Exchange because of its delay in publishing earnings and a $1.2 billion accounting scandal that was uncovered in 2015.
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