Westinghouse Electric Company said Wednesday that it was had filed petitions of Chapter 11 bankruptcy protection for the corporation a various subsidiaries and that it was seeking to restructure its business "as a result of certain financial and construction challenges in its U.S. AP1000 power plant projects."
Westinghouse has obtained $800 million in debtor-in-possession (DIP) financing from a third-party lender to help fund and protect its core businesses during its reorganization, the company said, noting it had filed the Chapter 11 filings took place in the U.S. Bankruptcy Court for the Southern District of New York in New York City.
“Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said Interim President & CEO José Emeterio Gutiérrez. “We are focused on developing a plan of reorganization to emerge from Chapter 11 as a stronger company while continuing to be a global nuclear technology leader.”
The DIP financing will fund Westinghouse’s core businesses of supporting operating plants, nuclear fuel and components manufacturing and engineering as well as decommissioning, decontamination, remediation and waste management as the company works to reorganize around these strong business units. Existing letters of credit have been cash collateralized in full and will remain in place. The financing will also allow for new letters of credit to be issued.
The Company has reached an agreement with each owner of the U.S. AP1000 projects to continue these projects during an initial assessment period. Westinghouse remains committed to its AP1000 technology as the industry’s premier Gen III+ nuclear power plant design, and will continue its existing projects in China as well as pursuit of other potential projects in the future.
Westinghouse’s operations in its Asia and Europe, the Middle East and Africa (EMEA) Regions are not impacted by the Chapter 11 filings. Customers in those regions will continue to receive the high-quality products and services they have come to expect in the usual course as the regions will also be supported by the DIP financing.
As part of today’s Chapter 11 filings, Westinghouse also filed several “first day” motions with the Court to ensure business continuity through payment of employee salaries, wages and benefits, as well as pay its suppliers for the delivery of services. The motions are expected to be approved by the Bankruptcy Court. Westinghouse is represented by Weil, Gotshal & Manges LLP in its Chapter 11 cases.
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Why would you say you would build a new design power plant for a fixed contract price? That just does not make sense, and to be 9 Billion over budget. Someone's calculations were way off, or someone has had their hand in the cookie jar...
Given the semi-hysterical reports in the popular press, this article is clear and succinct. If those of us in the industy don't speak out about the importance of nuclear power to our energy supply, the who will. Let's benefit from the past mistakes, and as engineers solve the construction and engineering issues to move the industry forward.