A bankruptcy judge has approved the $4.6 billion sale of Westinghouse Electric Co. LLC to Brookfield Business Partners LP, nearly a year after the American nuclear developer filed for Chapter 11 amid two costly expansion projects.
Judge Michael Wiles of the U.S. Bankruptcy Court for the Southern District of New York March 27 approved the sale of Westinghouse, a subsidiary of Toshiba Corp., to an affiliate of Canada’s Brookfield Asset Management Inc. Toshiba first acquired $5.4 billion of Westinghouse shares in 2006. In also signing off on Westinghouse's reorganization plan, Wiles paved the way for Westinghouse to exit from bankruptcy proceedings.
One of the two unfinished AP1000 reactors at V.C. Summer that Westinghouse was contracted to build.
Source: South Carolina Electric & Gas Co.
Westinghouse filed for bankruptcy in March 2017 after racking up $6.3 billion in cost overruns building two new reactors at the Alvin W. Vogtle Nuclear Plant in Georgia and two additional units at the V.C. Summer nuclear power plant in South Carolina. The two expansion projects were years behind schedule, and by the end of 2016 the company racked up $9.8 billion in related debt obligations.
"Confirmation of our plan of reorganization is one of the final steps in the completion of our strategic restructuring," said Westinghouse President and CEO José Emeterio Gutiérrez in a press release. "We are on track to fulfill our promise to emerge from this strategic restructuring process as a stronger business partner while retaining our primary focus on safety."
As part of Westinghouse's sale to Brookfield, announced in January, Japanese conglomerate Toshiba also agreed to sell its claims to a consortium of hedge funds led by the Baupost Group LLC, which reportedly made them the largest creditors in the bankruptcy proceedings.
Westinghouse said its creditors, including Baupost, "overwhelmingly" supported the reorganization plan. The company expects to close the sale in the third quarter of 2018, following regulatory approvals and subject to other customary closing conditions.
Reuters reported that the creditor group led by Baupost in late 2017 also acquired claims worth more than $2.2 billion from South Carolina utility SCANA Corp., which contracted Westinghouse to build the two reactors at V.C. Summer that were scrapped after Westinghouse declared bankruptcy.