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Toshiba has finally agreed to sell off its bankrupt nuclear business in the US for $4.6bn (£3.4bn) to a group of investors that is led by Brookfield Business Partners.
The Japanese conglomerate initially revealed its plans to sell Westinghouse late in 2016, after heavy delays to two of the company’s nuclear projects led the troubled engineering group to file for a Chapter 11 bankruptcy.
The said decision raised serious concerns over the largest planned nuclear project in the United Kingdom at Moorside in Cumbria which at the time, was anticipated to make use of a Westinghouse reactor.
Despite the nuclear fallout, Brookfield, a Canadian investment giant, said that the “iconic American company” is a high-quality business” which generates most of the company’s profitability via long-term service contracts.
Brookfield has a total of $265bn in assets under management. Westinghouse, on the other hand, is the largest service provider to the nuclear power facilities of the world and this core business has exhibited consistent free cash flows.
The purchase that is worth $4.6bn is anticipated to be funded with around $3bn of long-term debt financing and $1bn of equity. The balance will depend on environmental, pension, and other operating obligations.
José Emeterio Gutiérrez, the Westinghouse boss, said that the said acquisition “reaffirms our position as the leader of the global nuclear industry.”
He added: “Our transformation and strategic restructuring process is creating a stronger, stable, and more streamlined global Westinghouse business, for the benefit of our customers and employees.”
The Westinghouse woes the saddled Toshiba with losses amounting to $8.8bn, pushing the electronics giant to have its prized microchip business for sale for £18bn and back out of the NuGeneration consortium that is behind plans to build the Moorside plant.
The nuclear project will currently be built with the support of Kepco from South Korea which acquired a 100pc stake in the consortium late in 2016.