Toshiba forced to buy Engie's stake in NuGen

Published 06.04.2017 00:59

Japan's troubled conglomerate Toshiba said it would buy the 40 percent stake held by French group Engie in their British nuclear joint venture NuGen for about 15.3 billion yen ($138.6 million). The deal - prompted by the bankruptcy of Toshiba's U.S. subsidiary Westinghouse - was at Engie's request, said the Japanese group, which currently holds the remaining 60 percent of the venture. NuGen plans to build three reactors at the Moorside site in Cumbria in northwest England. The AP-1000 models are designed by Westinghouse, which filed for bankruptcy protection last week. Engie in December said it was studying the economic viability of its nuclear projects, especially in Britain, after press reports suggested it wanted to withdraw from them. Westinghouse's bankruptcy filing precipitated the move. Such a bankruptcy procedure entitles Engie to sell all of its stake in NuGen to Toshiba, or to acquire all the shares held by Toshiba, the Japanese firm said.

"Engie has accordingly exercised its rights to require Toshiba to buy its holding."

Toshiba has previously warned it was facing a writedown exceeding 700 billion yen at Westinghouse. Its shares have lost more than half their market value since late December, when Toshiba warned of the flood of red ink at Westinghouse and said it was investigating claims of possible accounting errors by senior executives at the division. Toshiba said the transaction would have no impact on its consolidated accounts. It fears a loss of 1.01 billion yen in the fiscal year which ended in March. But Engie's decision will complicate recovery efforts by the Japanese giant, which is trying to shed most of its overseas nuclear energy projects. Toshiba said Tuesday it would "continue to look for investors interested in investing in NuGen" in order to dispose of the 60 percent share it acquired in June 2014. A spokesman for Britain's Department for Business, Energy and Industrial Strategy said the government was committed to new nuclear plants as an important part of the nation's energy mix.

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