According to Kyodo News, Toshiba signed an agreement with the US Southern Power Company on the nuclear power plant construction project of Westinghouse Electric Corporation on the 9th, paying $3.68 billion to it, from April 2017 to January 2021.
In 2006, Toshiba spent $5.4 billion to acquire a 77% stake in Westinghouse. However, the serious delays in the construction of US nuclear power projects and the high premium purchases in 2015 led to huge losses.
Toshiba's fiscal year 2016 financial report data showed a net loss of 950 billion yen ($8.3 billion). The reason for the huge losses in FY2016 is that apart from the continuous loss of the home appliance business, its Westinghouse Electric Company is the biggest bane.
On March 29, Westinghouse announced its strategic restructuring on its official website. According to the announcement, the United States Westinghouse Electric Co., Ltd. and certain subsidiaries and affiliates filed an active application for restructuring companies under Chapter 11 of the US Bankruptcy Law.
Recently, the US Southern Power Company and the Toshiba Group reached an agreement to complete half of the nuclear power plant construction projects in Georgia, USA.
Toshiba said it has reached an agreement with the ordering party Southern Power Company to pay $3.68 billion. Toshiba’s burden limit was determined by fulfilling the contract for the Westinghouse parent company to provide debt guarantees for part of the construction costs.
The two sides signed an agreement on the 9th of the United States. Toshiba will pay in installments from October 2017 to January 2021. The amount paid does not exceed the tentative range of estimates for the 2016 fiscal year consolidated statement.
According to the agreement, the US Southern Power Company agreed not to require more than this amount of money, and will also provide assistance in the Westinghouse bankruptcy reorganization process based on the US Federal Bankruptcy Law.
Toshiba is responsible for the portion of the funds that should be paid by Westinghouse along with the construction costs exceeding the plan. It is reported that the content of the agreement is that if the actual cost is less than the current estimate, part of the funds will be returned to Toshiba. Toshiba also provided debt guarantees for two nuclear power plants that Westinghouse took orders from other US power companies. The fastest payment is expected within this month.
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