Nuclear options

4 January 2018 By Robert Cyran Follow @rob_cyran

Cost overruns building expensive, controversial nuclear plants got Westinghouse into trouble. Servicing, fueling and decommissioning them, however, is a more predictable business. That makes the $4.6 bln Brookfield is paying for the bankrupt Toshiba unit look realistic.

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Brookfield Business Partners, in combination with institutional partners, on Jan. 4 said it had agreed to buy Westinghouse Electric for approximately $4.6 billion. The price includes substantially all of the bankrupt company and excludes cash. The buyers will use some $1 billion of equity and $3 billion of debt as well as assuming certain pension, environmental and other obligations.

Brookfield Business Partners, the private-equity arm of Canada’s Brookfield Asset Management, will fund approximately half the equity on closing using existing liquidity.

Westinghouse, currently owned by Toshiba, entered bankruptcy in March 2017 after a series of cost overruns building nuclear plants. Toshiba bought Westinghouse for $5.4 billion in 2006.

The deal is the second nuclear power-related transaction this week. Earlier, Dominion Energy said it would buy Scana in a $7.9 billion all-stock merger. Scana in July abandoned two nuclear plants that Westinghouse had been building, after a series of cost overruns.

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Brookfield Business Partners, the private-equity arm of Canada’s Brookfield Asset Management, will fund approximately half the equity on closing using existing liquidity.

Westinghouse, currently owned by Toshiba, entered bankruptcy in March 2017 after a series of cost overruns building nuclear plants. Toshiba bought Westinghouse for $5.4 billion in 2006.

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