Shaw exits Westinghouse

07 September 2011

Shaw is selling its 20% stake in Westinghouse back to Toshiba to reduce debt and foreign exchange exposure. The Japanese majority owner is "open" to the idea of new investors. 


Sanmen first concrete (SNPTC)
One of Shaw's projects with Westinghouse: pouring first concrete
for an AP1000 unit at Sanmen, China, in March 2009


Shaw's option to trigger the sale was part of a deal struck with Toshiba during its $5.4 billion purchase of Westinghouse from the UK's former national nuclear company, BNFL, in October 2006.


Toshiba immediately sold on 20% of Westinghouse to Shaw, which financed that by issuing yen-denominated bonds. The arrangement between the firms included a 'put option' under which Shaw could call on Toshiba to buy back the stake at any time before October 2012, at which time it would be exercised automatically.


Shaw said yesterday it was exercising the option in order to reduce its exposure to the sliding dollar-yen exchange rate. The dollar value of the debt had grown by "over $600 million to a total of almost $1.7 billion," it said. At the time the deal was agreed, $1 would buy about ¥116, but the figure is only ¥77 today.


Separate statements from all parties emphasised their commitment to continue working together on the four Westinghouse reactors under construction in China and the four at the groundwork stage in America.


Toshiba said that Shaw would be considered for future plant construction and engineering projects and a "collaborative relationship" would be maintained. However, other partners could be selected on a project-by-project basis. "This is particularly the case of the projects in Europe, South America and India, where Westinghouse may be required to allow local companies to participate."


Assuming appropriate consents for the transaction are obtained, some 87% of Westinghouse will be held by Toshiba within 90 days. Ten percent is held by uranium and rare-earth metals producer KazAtomProm, and 3% by component-maker IHI.


Toshiba said it "remains open" to the idea of inviting other firms to invest in Westinghouse "if such potential investors could share a long-term vision and business strategy." It noted that "several companies have already expressed an interest in investing in the company."


Researched and written
by World Nuclear News