'Business as usual' for Cumbrian nuclear project after Westinghouse bankruptcy filing

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Artist's impressions of how Moorside might look
Artist's impressions of how Moorside might look
3 April 2017 1:49PM

The firm with plans to bring nuclear new build to Cumbria insists it will be "business as usual", despite the company due to build its reactors filing for bankruptcy.

NuGen made the comment after Toshiba's US-based nuclear division, Westinghouse, filed for Chapter 11 bankruptcy.

The Japanese stock market reported the news in an alert issued this morning.

Toshiba has a 60 per cent stake in NuGen, which has plans for a new power station at Moorside, near Sellafield.

The Japanese giant has insisted it remains committed to the Cumbrian development - though it will not take on risk from construction - but the company's financial situation has fuelled fears over its involvement.

Rumours have circulated for weeks about the financial health of Westinghouse and the likelihood that it would file for Chapter 11 status. Chapter 11 bankruptcy gives a company in financial difficulties protection from its creditors for a limited period to allow it to reorganise.

A NuGen spokesman said: “NuGen is continuing to develop its Moorside project to deliver three Westinghouse AP1000 reactors in west Cumbria.

"NuGen will continue to work alongside our technology supplier, Westinghouse, and our shareholders, Toshiba and Engie, in taking forward the Moorside development phase.

"NuGen will continue in a 'business as usual' manner working in collaboration to gain the appropriate permits and licences required to construct Europe’s largest nuclear new build project, and will continue to increase value and attractiveness of the project to potential future investors, as we have always done."

A Toshiba spokesman said: "The Chapter 11 filings have made planned supply of the AP1000 (nuclear power plant) for the UK project uncertain, and we have therefore recorded an impairment loss covering the cost of the NuGen project.

"However, if you consider the project in terms of the overall power generation business, there is no change in the business climate.

"We will work to enhance NuGen project's value, in consultation with stakeholders, such as Engie and UK government.

"Toshiba is committed to invest until the FID (final investment decision), but there is a certain point before the FID where we can review and determine whether or not to continue the project.

"Also, we are allowed to sell the shares through a certain process and under certain conditions at other times.

"We would like to explore the alternatives, including sales of the shares, and carefully watch the situation."

It has been reported that Korea Electrical Power Company (Kepco) may be a potential buyer for Westinghouse and it has also expressed an interest in buying Toshiba's stake in NuGen.

Toshiba has forecast a 713bn yen (£5bn) loss in its nuclear business and its woes stem mainly from Westinghouse.

In January the company announced the subsidiary may have overpaid - by several billion dollars - for another nuclear construction and services business.

This led the company to the review of its involvement in non-Japanese nuclear projects - including Moorside in Cumbria - and put its semiconductor business up for sale.

It subsequently announced that it remained committed to the Cumbrian development.

Stewart Young, the leader of Cumbria County Council, had some concerns following the latest news.

He said: "I think what it means is that there is going to be considerable delay to the NuGen project. I do not see how they can meet their existing time lines and we need to know what that means."

Chris Jukes, of the GMB union, was also worried.

He said: "It is vital that this project is given the certainty it needs and therefore we are calling on an urgent Government announcement to give clear and unambiguous clarity for the short, medium and long-term future of Moorside."

A spokeswoman for the Department for Business, Energy and Industrial Strategy said: "The UK Government is committed to new nuclear as an important part of our energy mix, having commissioned the first new nuclear power station in a generation at Hinkley Point C. The UK is one of the most attractive countries to invest in new nuclear and we engage regularly with the developers of proposed new nuclear projects."

Interim president and chief executive of Westinghouse José Emeterio Gutiérrez said: “We are focused on developing a plan of reorganisation to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader.”

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