Toshiba Dumps Westinghouse For $4.6B

Toshiba Dumps Westinghouse For $4.6B

Andrew Cummings
January 12, 2018

A Canadian investment fund is planning to buy bankrupt U.S. nuclear infrastructure firm Westinghouse Electric from Toshiba. Brookfield Business Partners L.P. Limited Partnership Units has a 1 year low of $23.66 and a 1 year high of $36.15. A portion of Brookfield Business Partners' investment may be syndicated to other institutional investors.

The deal would be funded with approximately $1 billion of equity, approximately $3 billion of long-term debt financing and the balance by the assumption of certain pension, environmental and other operating obligations.

Westinghouse has said it is aiming to exit bankruptcy as soon as March, which would allow Toshiba to book tax benefits in the current fiscal year.

Representatives for Blackstone and Apollo weren't immediately available for comment.

Since then, reports have surfaced that President Donald Trump's administration is encouraging Saudi Arabia to consider bids by Westinghouse and other USA companies to build reactors - a politically controversial bid considering previous US agreements prohibited the enrichment of uranium.

The demise of Westinghouse was a major setback for the country's nuclear industry, potentially dooming new nuclear build in the U.S. Problems with its AP1000 nuclear reactor models led to two major nuclear projects falling behind schedule and mounting costs.

Toshiba's struggling nuclear unit, Westinghouse Electric, is to be purchased by a Canadian company in a deal valued at $4.6bn (£3.4bn).

The deal won't include what had been the company's most prized projects - plans to build its AP1000 reactors for USA utilities in SC and Georgia. In past days, Dominion Energy Inc. has offered to buy Scana. Toshiba was also accused of paying too much for Westinghouse in 2006 (US$5.4bn), while the concerns about nuclear generation following the Fukushima accident were also cited by analysts.

The officials say Westinghouse is a leader in its field and has an established customer base. Four research analysts have rated the stock with a buy rating, Brookfield Business Partners L.P. Limited Partnership Units now has a consensus rating of "Buy" and a consensus price target of $29.66.

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