UK nuclear project in doubt as Toshiba admits survival at stake

The Moorside nuclear power project in Cumbria, England is in doubt after sole owner Toshiba admitted that it may not survive recent financial losses.

Toshiba became the sole owner of the $12.4bn NuGen project last week after Engie sold its stake, but matters have since deteriorated further.

The company this week posted losses of $5.2bn for the first nine months of the year and warned that the annual shortfall could top $9.1bn.
Moorside nuclear power projectToshiba chief executive
Toshiba warned of ‘material events and conditions that raise substantial doubt about the company’s ability to continue as a going concern’.

The Japanese firm is reeling from the twin impact of an accounting scandal and the bankruptcy of its US nuclear unit, Westinghouse.

The unaudited results have raised the possibility that Toshiba could be delisted from the Tokyo Stock Exchange, though chief executive Satoshi Tsunakawa said the firm would ‘do its utmost to avoid it’.

Kevin Coyne, UK national officer at union Unite, called on Business Secretary Greg Clark to step in and ‘pledge public investment to ensure that the project goes ahead on schedule’.

UK ministers are understood to be wooing potential backers in South Korea in a desperate effort to rescue the project, which has been plagued by setbacks and a revolving door of owners since it was launched in 2010.

It was initially hoped the plant would be able to generate power by 2023 under SSE, GDF Suez and Iberdrola. But SSE sold its stake to the other two partners in 2011. Then Spanish utility firm Iberdrola later quit, selling its share to Toshiba.à‚ 

Up until last week, the Japanese giant had held a 60 per cent stake, with French firm Engie holding the remaining 40 per cent, before they too departed.

A spokesman for the Department for Business, Energy and Industrial Strategy said NuGen, the company that owns the project, had ‘always planned to bring in other partners’ and ‘engages regularly with a range of developers and investors’.

Toshiba, which supplies reactors for NuGen through Westinghouse, has already admitted the supply of further reactors for the plant is uncertain now it has filed for bankruptcy.

Commenting on the future of NuGen, a spokesman for 142-year old Toshiba said: ‘No details have been decided yet, but we would like to explore alternatives, including sales of the shares.’

While the news and results look ominous for the company, its management believe they may have a means of saving the company.

According to the Wall Street Journal the company said it has a comeback plan that includes selling its semiconductor unit and asking its banks for forbearance.

The semiconductor business, which makes flash-memory chips for smartphones and computer servers, has drawn a bid of up to à‚¥3 trillion from Foxconn Technology Group of Taiwan, people familiar with the bid said earlier this week.

“I believe our financial standing is solid, despite the numbers we put out, if we consider the value of the unit for sale,” Tsunakawa said at a news conference on Tuesday.

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