KazAtomProm sees no negative impact from WEC

26 April 2017

Kazakh uranium producer KazAtomProm said today that the "reorganisation" of Westinghouse Electric Company (WEC) will have no negative impact on its financial performance. Westinghouse's shares are split between Toshiba (87%), KazAtomProm (10%) and IHI Corporation (3%).

Westinghouse filed petitions for reorganization under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York on 29 March to enable strategic restructuring amid financial and construction challenges in its US AP1000 power plant projects.

"The acquisition of WEC's shares from Toshiba Corporation was executed with the right to a put option agreement in respect to acquired shares, under the terms of which, NAC KazAtomProm JSC has the right to sell its shares back to Toshiba Corporation at a fixed price proportionate to the initial investments," KazAtomProm said.

"Therefore, pursuant to the terms set in the put option agreement with Toshiba Corporation, once exercised, NAC Kazatomprom JSC is contractually entitled to receive the originally invested amount," it added.

Toshiba has said KazAtomProm is entitled to sell its 10% equity holding in Westinghouse pursuant to put option agreements that can be exercised on or after 1 October.

On 11 April, the Japanese electronics company reported a loss of ¥532 billion ($4.8 billion) for the first nine months of its 2016 financial year (April to December), up from a ¥479.4 billion loss recorded in the same period of FY2015. Toshiba, which plans to announce its final earnings report for FY2016 in mid-May, had warned in December last year that it might have to write off "several billion" dollars because of Westinghouse's purchase in 2015 of US construction firm CB&I Stone & Webster.

Toshiba said on 24 April it will establish its four in-house companies as wholly-owned subsidiaries and aim to "to maximise the value of each business". As of 1 October, it will split off its Energy Systems & Solutions Company, and the Nuclear Energy Systems & Solutions Division, and transfer them to a newly established company.

Researched and written
by World Nuclear News

Filed under: Contracts, Kazakhstan