Battered Toshiba seeks exit from UK, India in nuclear retreat: sources

Fri Feb 3, 2017 4:00am EST
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By Geert De Clercq and Kentaro Hamada

LONDON/TOKYO (Reuters) - Toshiba Corp plans to withdraw from its lead role in projects to build nuclear plants in Britain and India, sources with direct knowledge of the matter said, marking a retreat as it wrestles with an imminent multi-billion dollar writedown.

Such a move would leave Toshiba's U.S.-based Westinghouse focused on the much narrower field of nuclear reactors and services, rather than civil engineering for nuclear power plants, or their construction, the sources said.

But it would throw into question the future of a key plank in Britain's plans to replace ageing nuclear reactors, and the future of India's biggest nuclear project to date.

Toshiba became one of the nuclear sector's biggest players with the purchase of Westinghouse in 2006, the height of a short-lived boom. But the industry was left battered by the 2011 Fukushima nuclear disaster and Toshiba's woes have only deepened - first with a 2015 accounting scandal and now damaging cost overruns at U.S. projects.

Sources familiar with the matter have said the writedown on the U.S. business - set to be detailed on Feb. 14 when Toshiba reports earnings - could be around $6 billion, wiping out the group's shareholder equity.

NuGen, a Toshiba-led venture with French utility Engie, was set up to build three AP1000 nuclear reactors designed by the Japanese conglomerate's Westinghouse unit at the Moorside site on the coast of Cumbria.

But the $15 billion-$20 billion investment is now an impossible financial burden for Toshiba to help shoulder, one of the sources said, adding it had not yet notified the UK government.

Two of the sources said Engie also wants to pull out of NuGen, as new Chief Executive Isabelle Kocher does not want to invest in new nuclear projects. Engie declined to comment.   Continued...

FILE PHOTO -  The logo of Toshiba Corp is pictured at its headquarters in Tokyo, Japan, August 31, 2015.   REUTERS/Yuya Shino/File Photo