Toshiba asks financial firms to help with UK nuclear project cost -sources
By Kentaro Hamada and Taro Fuse
TOKYO (Reuters) - Toshiba Corp (6502.T: Quote) is asking Japanese financial institutions to help fund a nuclear project in northwest England, sources with direct knowledge of the matter said, as the conglomerate seeks ways to ease its financial burden after a $1.3 billion accounting scandal.
Toshiba holds a 60 percent stake in the NuGen UK nuclear joint venture with France's Engie (ENGIE.PA: Quote), and plans to provide three of its Westinghouse AP1000 reactors for the Moorside project to be built near the Sellafield nuclear site in west Cumbria.
While financing plans have yet to be formally drawn up, the scandal has made it more difficult for Toshiba to take on its planned share of the building costs by itself, the sources said, adding that they estimate its share of those costs at more than $2 billion.
Tapping domestic financial institutions for help in funding an overseas nuclear project is a rare move for a Japanese nuclear company, underscoring the financial impact of the scandal.
In overseas nuclear reactor projects, it is common for the main company in charge to foot around 10 percent of the total cost, which it usually does either on its own or in partnership with other nuclear power firms.
"It has become difficult for Toshiba to do this on its own," said one of the sources. The sources said the conglomerate had made requests to Japanese insurers as well as some banks including Norinchukin Bank [NORB.UL], and has hired HSBC (HSBA.L: Quote) as a financial adviser.
A Toshiba spokeswoman declined to comment, while NuGen and Norinchukin officials were not immediately available for comment. The sources declined to be identified as they were not authorized to speak to the media on the matter.
Toshiba's stock has fallen about 40 percent since news of its accounting problems began to emerge in early April. Continued...