Toshiba to dump UK Moorside nuclear project, in effort to stay afloat?
Toshiba considers sale of Moorside nuclear project in Cumbria as own survival in doubt in wake of £7bn losses http://www.telegraph.co.uk/business/2017/04/11/toshiba-questions-survival-warns-losses-could-hit-7bn/ 11 APRIL 2017
Toshiba is considering selling a stake in its nuclear project in Cumbria after warning it could struggle to remain in business as a result of expected annual losses of more than 1trn yen (£7bn).
The Japanese conglomerate, which makes everything from flash memory drives to laptops and semiconductors, admitted it is considering selling some or all of nuclear specialist NuGeneration to keep itself afloat.
NuGen currently owns 100pc of the Moorside site, after buying 40pc back from France’s Engie for $138.5m (£111m) earlier this month.That sale followed the Chapter 11 bankruptcy filing of Westinghouse, another Toshiba-owned company which is set to provide reactors for Moorside.
Asked what it would do with NuGeneration, a Toshiba spokesman said while no final decisions have been made “we would like to explore alternatives, including the sales of shares.”
He went on to explain that Toshiba is “carefully monitoring the situation in consultation with other stakeholders including the British Government.”Separately NuGeneration said it had been looking for investors prior to Westinghouse’s troubles and emphasised that the construction of Moorside was always going to be done by a third party.
But a spokesman acknowledged “there is no certainty” with regards to Westinghouse’s involvement in the development stage of the project.
Theoretically, Westinghouse’s AP1000 reactors, which have received regulatory approval, remain attached to the project but if a new investor were to come on board, it is unclear if different reactors may be proposed, potentially delaying the already behind schedule project yet further.
Samira Rudiga an energy fund manager at Guinness Asset Management, said the news was another nail in the coffin for the UK’s nuclear hopes.
“Nuclear does not make sense in the UK,” she said. “It takes 10 years to build and can take as long if not longer just to come to a decision to build a plant.”However, she expects the Government to still consider nuclear projects and thought there would be companies in Europe and Asia able to take on Toshiba’s stake in Moorside.
Greg Clark, the Business secretary, travelled to South Korea earlier this month in a bid to save the project, appealing to Korean nuclear giant Kepco to invest.
“For the reasons stated above, there are material events and conditions that raise the substantial doubt about the company’s ability to continue as a going concern,” Toshiba said.
At the end of 2016, the impending multi-billion-dollar write down triggered one of the worst-ever share fallsfor a major Japanese company, with ratings downgrades and investor pessimism erasing almost all of its 87pc rally so far that year. Toshiba delayed publication of its annual results twice prior to publication, and the company took the unusual step of publishing its accounts without sign-off from its auditor, PriceWaterhouseCoopers Aarata.
Toshiba said that while it had not yet fully determined the full cost of restructuring Westinghouse, its calculations suggested net income would fall by roughly 620bn yen.
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