Toshiba has sold its US nuclear engineering group, Westinghouse Electric, in a deal worth $4.6bn.

Canadian asset manager as acquired the group, although it must still gain approval from the bankruptcy court and other global regulators.

FT reports that the move is a vote of confidence in the future of Westinghouse’s nuclear services business, in spite of the problems at the two large new nuclear construction projects in the US that forced the company into bankruptcy.
Toshiba Westinghouse
Brookfield Business Partners, a separately-listed private equity unit of Brookfield Asset Management, is paying about $4bn in cash for 100 per cent of Westinghouse’s equity, with pension and environmental costs and other liabilities making up the remainder of the price.

Brookfield said that Westinghouse was “an iconic American company” that had a strong market position as the largest service provider to nuclear power plants worldwide and earned the bulk of its profits from long-term contracts.

Although the US reactor contracts have been disastrous, Westinghouse’s services business generates free cash flow. The Brookfield group, which has $265bn under management, in 2016 launched a $14bn infrastructure investment fund, the world’s largest.

Westinghouse was forced into bankruptcy after long delays and soaring costs at projects to build four of its AP1000 reactors at two sites in the southern US. Since the company entered Chapter 11 bankruptcy protection in March last year, it has announced plans to cut about 1,500 jobs from its workforce of about 11,500, given up on acting as a lead contractor on building new reactors and taken full control of Mangiarotti, an Italy-based nuclear engineering company that was jointly owned with Toshiba.

José Emeterio Gutiérrez, chief executive of Westinghouse since 2016, said “Our transformation and strategic restructuring process is creating a stronger, stable, and more streamlined global Westinghouse business, for the benefit of our customers and employees.”