More woes for Moorside backer Toshiba
A KEY player in Cumbria's planned nuclear new build has seen its share price fall dramatically after its finances were branded "very fragile".
Ratings agency S&P Global has announced it may downgrade the credit rating of Toshiba - which has a 60 per cent stake in NuGen, the company with proposals to build a power plant in Moorside, near Sellafield - if it receives financial support which includes debt restructuring.
This would affect the way lenders would be willing to deal with the company, which announced earlier this week that it was likely to announce a net loss of 390bn yen (£2.74bn) for the full year to March 31.
It's share price fell by 10 per cent in Friday trading on the Japanese stock exchange, ending the day at 184 yen (£1.31) each, down from 199 yen (£1.41) at the start of the day.
"Given Toshiba's already very fragile financial standing, whether the company can receive continuous financial support from its creditor banks, including liquidity support, is a key factor in our credit analysis," S&P said.
"Even in the event banks continue to provide financial support for the company, if it includes any form of debt restructuring we define as selective default, we will lower the ratings by multiple notches."
Toshiba announced on Tuesday that it remained committed to investment in Moorside but would eventually seek to sell its stake to new investors.
It added: "Toshiba will consider participating in the project without taking on any risk from carrying out actual construction work.”
This statement was welcomed by both NuGen and Prime Minister Theresa May.
Toshiba's woes stem from another part of its nuclear operations.
Last month the company announced its US subsidiary, Westinghouse Electric, which was originally part of BNFL, 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 as well as the sale of its semiconductor business.
Shigenori Shiga, resigned as Toshiba's chairman, taking responsibility for problems that will result in a forecast 713bn yen (£5bn) loss in its nuclear business.