Westinghouse Electric files for bankruptcy

• 7 years ago (2017-03-30)
• David Flin

North America 1004 Nuclear 643

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Westinghouse Electric Company filed for bankruptcy protection on 29 March. The filing comes as the company’s corporate parent, Toshiba of Japan, scrambles to staunch huge losses stemming from Westinghouse’s troubled nuclear construction projects in south USA. The future of these projects is in doubt.

Richard Nephew, a senior research scholar at the Center on Global Energy Policy at Columbia University, said: “This is a big and consequential deal. You’ve had some power companies and big utilities run into financial trouble, but this kind of thing hasn’t happened before.”

Even before the bankruptcy filing, Toshiba had essentially retired Westinghouse from the business of building nuclear power plants, instead concentrating on maintaining existing reactors and developing reactor designs. This reduces the number of companies capable of building nuclear reactors. GE has scaled back its nuclear operations, expressing doubt about their economic viability. Areva is facing heavy losses and is undergoing large-scale restructuring.

Toshiba has said that it would like to spend all or part of Westinghouse. However, with a shrinking list of potential buyers, that will be a difficult task.

After writing down Westinghouse’s value, Toshiba said that it expected to book a net loss of $9.9 billion for its current fiscal year, which ends on 31 March. Satoshi Tsunakawa, President of Toshiba, said: “We have all but completely pulled out of the nuclear business overseas. It is unclear whether Westinghouse will be able to complete any of its projects.

Dennis Pidherny, a Managing Director at Fitch Ratings, said that it was possible that the company’s bankruptcy filing could terminate construction contracts, and that it could be difficult for the utilities to find another builder to take them over.