Engie gives notice to sell NuGen stake

05 April 2017

French utility Engie plans to transfer its 40% share in UK nuclear power plant developer NuGeneration (NuGen) to Japan's Toshiba. NuGen, which plans to build three Westinghouse AP1000 reactors at Moorside in West Cumbria is "facing some significant challenges", Engie said, that have led to the decision to exercise its contractual right to transfer its stake to Toshiba.

Toshiba has a 60% stake in NuGen and owns 87% of USA-based Westinghouse, which on 29 March filed for Chapter 11 protection from creditors to enable strategic restructuring amid "financial and construction challenges" in its US AP1000 power plant projects. Both Toshiba and Westinghouse stressed that only Westinghouse's US operations would be affected by the filing.

"Engie, as operator of an important European nuclear fleet, remains willing to put its know-how and expertise at the service of NuGen and help any restructuring with new potential partners for the development, construction and operation of the project," the French company said yesterday.

It added: "Engie, through its affiliates Engie Electrabel, Tractebel, Endel, Engie Axima and Engie Ineo, remains an important contributor to the European nuclear industry. As a leading energy and services company in the United Kingdom, Engie continues to play a major role in the UK's energy transition. With 17,000 employees in the UK, the group will continue to develop its business, as demonstrated by the agreement announced last month to acquire Keepmoat's regeneration business. Engie is using its capabilities to lead the UK's progression towards a more secure and sustainable future, through a strategy based on investment in critical energy infrastructure, integration of its energy expertise with its broad services offer, and innovation in customer-led solutions and technologies." Engie announced last month it had signed an agreement to acquire the regeneration business of Keepmoat, a housebuilding company that provides regeneration services for local authorities in the UK.

Toshiba said it had received notice from Engie on 3 April that it had exercised its right to require Toshiba to purchase all shares held by Engie in NuGen.

Toshiba noted that Westinghouse's Chapter 11 filing met the definition of an 'event of default' under the terms of its NuGen shareholder agreement with Engie. Default entitles Engie to sell its entire shareholding in NuGen to Toshiba, or to acquire all the shares held by Toshiba.

It added that the approximate purchase price of Engie's stake in NuGen is ¥15.3 billion ($137.5 million). The date of payment and closing of the purchase are to be discussed with Engie under the terms of the agreement.

Toshiba also said it would continue to look for investors interested in NuGen and seek to sell off its holding in the company.

Toshiba acquired a 60% stake in NuGen in June 2014 by purchasing all the shares held by Spanish energy company Iberdrola and another 10% share held by Engie - previously named GDF Suez. Toshiba subsequently partnered with Engie to develop the Moorside project.

UK regulators announced on 30 March that the AP1000 had successfully completed the Generic Design Assessment process. NuGen is now working towards final investment decisions on the project, including acquiring a development permit.

Researched and written
by World Nuclear News