TOKYO - Wednesday, September 7th 2011 [ME NewsWire]
(BUSINESS WIRE)-- Toshiba Corporation (TOKYO: 6502) announced today that the company will increase its ownership in Westinghouse Electric by acquiring all shares (20% of the holding companies of Westinghouse Electric) currently held by Nuclear Energy Holdings LLC, a wholly owned subsidiary of the Shaw Group Inc., the U.S. engineering company. The purchase will increase Toshiba’s ownership of Westinghouse from 67% to 87%.
The timing of the share acquisition is as yet undetermined, as it is subject to the completion of Shaw’s procedures.
In October 2006, Toshiba acquired majority ownership of Westinghouse. Since then, Westinghouse has steadily expanded its businesses and has won orders for 10 units of AP1000, the next-generation pressurized water reactor, in the United States and China. In coming years, the AP1000 is expected to enjoy its growing business opportunities on a global scale. Even in the aftermath of the Great East Japan Earthquake, many countries and regions around the world, including the U.S.A., China, the U.K., India, Brazil and countries of Eastern Europe, have maintained their support for nuclear power as a means to achieve energy security and mitigate climate change and continue to promote a basic policy supporting construction of nuclear power plants.
Shaw Group has partnered with Toshiba and Westinghouse for the plant construction and engineering of the AP1000 in projects in the United States and China. Even after the share acquisition from Shaw Group, Toshiba and Westinghouse intend to maintain collaborative relations with Shaw Group. Toshiba, Westinghouse and Shaw Group have also confirmed that they will continue to closely work together in order to complete outstanding orders for the AP1000 in the United States and China as scheduled.
In respect of plant construction and engineering work for future projects, Toshiba and Westinghouse will consider selecting Shaw Group, maintaining a collaborative relationship with Shaw Group to capture and share best practice, but also may consider selecting new partners on a project-by project basis after Shaw Group’s exercise of the put option to sell its stake in Westinghouse to Toshiba. This is particularly true in the case of the projects in Europe, South America and India where Westinghouse may be a required to allow local companies to participate in such projects.
While Toshiba will reinforce its ownership position in Westinghouse through this stock acquisition, it remains open to the idea of inviting the participation of new investors in Westinghouse, if Toshiba and such potential investors could share a long-term vision and business strategy with respect to Westinghouse business. Several companies have already expressed an interest in investing in the company.
Shaw Group has announced its decision to exercise its put option to sell its stake in Westinghouse to Toshiba, in accordance with the contractual terms between Shaw Group and Toshiba. Shaw Group issued yen-denominated bonds at the time of its initial purchase of the stock, and Toshiba understands that, due to the recent significant appreciation of the Japanese yen against the U.S. dollar, Shaw Group has incurred a substantial foreign exchange loss on the bonds. Under the circumstances, Shaw Group has decided to exercise the put option.
Contacts
Toshiba Corporation
Keisuke Omori, +81-3-3457-2105
Corporate Communications Office
Fax: +81-3-5444-9202
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