Japanese electronics conglomerate Toshiba Corp - owner of Westinghouse and its CB&I Stone & Webster subsidiary - is to review its nuclear reactor construction business outside of Japan, the company's president and CEO has said.
Satoshi Tsunakawa was quoted by the Asahi Shimbun as saying at a 27 January press conference, "We focused on the nuclear business among all of our energy businesses, but this will change. This will entail a review of our overseas (nuclear) business." Toshiba's domestic nuclear business would focus on maintenance, repairs and decommissioning of reactors, he said.
Tsunakawa said Toshiba would concentrate on designing, manufacturing and supplying nuclear reactors. According to Forbes, he said Westinghouse is "unlikely to carry out actual construction work for the future nuclear power plant projects to eliminate risk".
Tsunakawa reportedly told the press conference that Toshiba may separate its nuclear operations from its energy systems and solutions business unit, placing it directly under his control, in order to strengthen risk management. He said such a move would "support us in our goal of securing stronger management of US nuclear project costs and enhanced governance of Westinghouse".
Last month, Toshiba said it may have to write off "several billion" dollars because of Westinghouse's purchase of CB&I Stone & Webster - a US construction firm that specializes in nuclear power projects. The company said it needs to "determine the value" of the possible Westinghouse loss and the impact on Toshiba's financial forecast for 2016 announced in November.
In a 24 January statement, Toshiba said: "Determination of the goodwill requires verification of enormous data and considerable time for scrutiny. Given this, Toshiba will announce the goodwill and others, and its earnings result for the third quarter of FY2016, on 14 February 2017."
Toshiba bought Westinghouse in 2006 for about $5.4 billion. In 2015, Westinghouse entered into a purchase agreement to acquire 100% of the shares of S&W from Chicago Bridge & Iron Company (CB&I) for $229 million, and the transaction closed in December that year. Announcement of completion of the acquisition on 5 January 2016 explained that the amount of goodwill would be finalised by 31 December, in accordance with US GAAP, or Generally Accepted Accounting Principles. Goodwill is the premium an acquirer pays over the value of a company's tangible assets, such as factories and equipment.
Upon closing of the transaction, Westinghouse assumed full responsibility for all AP1000 projects - four in the USA and four in China - and CB&I's nuclear integrated services business.
NuGen, the UK joint venture between Toshiba and France's Engie, plans to build a nuclear power plant of up to 3.8 GWe gross capacity at Moorside, in West Cumbria, using AP1000 nuclear reactor technology provided by Westinghouse.
In a 27 January statement announcing the spin-off of its flash memory business into a separate company, Toshiba said: "Given the possibility of a loss of impairment [as a result of goodwill and loss related to the acquisition of CB&I Stone & Webster], Toshiba Group needs to enhance its financial structure, and the company is considering various capital measures."
Following his appointment as Toshiba's new CEO last year, Tsunakawa reaffirmed the company's commitment to nuclear power, saying in June that its goal of building 45 nuclear reactors around the world by the 2030 financial year was achievable.
Researched and written
by World Nuclear News