Canadian fund to buy Westinghouse

Canadian fund to buy Westinghouse

Canadian fund to buy Westinghouse

Ten months after Westinghouse Electric Company filed for bankruptcy protection, putting in jeopardy its construction work on two new nuclear power plants with AP1000 reactors for South Carolina Electric & Gas Company (SCE&G) in Jenkinsville, S.C., and two others for Georgia Power Company (owned by Southern Company) near Waynesboro, Ga., the company announced January 4 that it "has agreed to be acquired by Brookfield Business Partners L.P. together with institutional partners" for approximately $4.6 billion.

The effect of the deal on the Westinghouse business in the United Kingdom is yet to become clear but Brookfield has a track record of investing in and developing "long-life, high quality assets". A portion of Brookfield Business Partners' investment may be syndicated to other institutional investors.

The transaction is expected to be funded with approximately $1 billion of equity, approximately $3 billion of long-term debt financing, and the balance by the assumption of certain pension, environmental and other operating obligations, according to a statement from Brookfield.

Westinghouse has said it is aiming to exit bankruptcy as soon as March, which would allow Toshiba to book tax benefits in the current fiscal year.

Officials at Brookfield Business Partners said on Thursday they would acquire Westinghouse for 4.6 billion dollars.

Representatives for Blackstone and Apollo weren't immediately available for comment. But because Westinghouse has filed for Chapter 11 bankruptcy protection, it is not treated as Toshiba's consolidated subsidiary.

The deal excludes the two projects which helped bring down the company founded by George Westinghouse in 1866: plans to build four of its AP1000 reactors for US utilities in SC and Georgia.

The deal won't include what had been the company's most prized projects - plans to build its AP1000 reactors for US utilities in SC and Georgia.

Westinghouse ran up such huge liabilitites that Toshiba put the memory business up for sale. And in November, Brookfield Property Partners offered to buy the remaining shares in General Growth Properties, adding to a large stake it purchased to bring the mall owner out of bankruptcy. In South Carolina, owner Scana Corp. made a decision to abandon the new reactors, sparking a political backlash that prompted federal and state investigations.

Toshiba said Friday its nuclear power unit, Westinghouse Electric, will move toward rehabilitation under US bankruptcy procedures.

Created to be safer than reactors of old, the Westinghouse AP1000 design was supposed to revive an industry plagued by the accident at Three Mile Island in 1979.

Toshiba bought Westinghouse in 2006 for over $5bn, but due to decline in the oil and renewable energy prices, the business lost its profitability.

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