Court approves Westinghouse reorganisation plan

28 March 2018

Westinghouse Electric Company's reorganisation plan - including its sale to Brookfield - has been approved by the US Bankruptcy Court. Westinghouse said the court's approval of the plan is a "significant milestone in the company's strategic restructuring".

Westinghouse filed for Chapter 11 bankruptcy protection with US courts in March 2017 to enable it to undergo strategic restructuring. The company's bankruptcy filing affected only its US operations, including projects to construct a total of four AP1000 reactors at two projects, Vogtle in Georgia, and VC Summer in South Carolina.

On 4 January, it was announced that Brookfield Business Partners, together with institutional partners - collectively known as Brookfield - had agreed to acquire 100% of Westinghouse from Japanese parent company Toshiba for about $4.6 billion.

"Confirmation of our plan of reorganisation is one of the final steps in the completion of our strategic restructuring."

Jose Gutierrez,
Westinghouse president and CEO

Toshiba said on 18 January that it had signed a share purchase agreement under which it will also sell to Brookfield all shares it holds in Westinghouse-related assets - Toshiba Nuclear Energy Holdings (US) Inc and Toshiba Nuclear Energy Holdings (UK) Limited - for $1.

On the same day, Toshiba said it had signed an assignment and purchase agreement with Brookfield and Nucleus Acquisition - a consortium controlled by the Baupost Group - under which it will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.

Toshiba also entered into a Plan Support Agreement with key stakeholders in Westinghouse's Chapter 11 reorganisation proceedings, including Westinghouse, the Statutory Committee of Unsecured Creditors, Brookfield and Nucleus. Under that agreement, Toshiba's equity interests will be subordinated to payment of all other Westinghouse claims in the proceedings. The stakeholders also agreed to support the reorganisation plan and the acquisition of Westinghouse by Brookfield.

Westinghouse announced yesterday that its reorganisation plan had been approved by the US Bankruptcy Court for the Southern District of New York.

The company said it expects the transactions to close in the third quarter of 2018, "subject to customary closing conditions including, among others, regulatory approvals".

Westinghouse president and CEO Jose Gutierrez said: "Confirmation of our plan of reorganisation is one of the final steps in the completion of our strategic restructuring. Our customers, employees, suppliers, vendors, and other important constituencies overwhelmingly supported our plan of reorganisation. We are on track to fulfil our promise to emerge from this strategic restructuring process as a stronger business partner while retaining our primary focus on safety."

Researched and written
by World Nuclear News