Struggling Westinghouse Electric sold to Brookfield for $4.6 bn

Financially-troubled Westinghouse Electric announced Thursday it agreed to be sold to Brookfield Business Partners for $4.6 billion, pending approval by a US bankruptcy court.

Westinghouse, owned by Japan's Toshiba since 2006, has faced deep losses due to its stalled nuclear business, including cancelled plants in South Carolina. As a result, the company filed for bankruptcy protection in March 2017.

Brookfield, which manages $265 billion in assets and specializes in infrastructure, energy and real estate, said it would take on about $3 billion in long-term debt to finance the transaction.

Westinghouse had been hailed by Toshiba as a major growth engine because of its nuclear energy technology.

But an expected uptick in US nuclear power has been hindered by competition from cheap natural gas, and cost overruns at Westinghouse's nuclear construction projects in South Caroline and Georgia.

Toshiba announced in November it would raise $5.3 billion by issuing new shares. But the parent company has been on the ropes due to billions of dollars of losses at Westinghouse prior to its bankruptcy.

"Brookfield's acquisition of Westinghouse reaffirms our position as the leader of the global nuclear industry," said Westinghouse chief executive Jose Emeterio Gutierrez.

"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."

Brookfield Business Partners chief executive Cyrus Madon praised Westinghouse as "a leader in its field, with a long-term customer base and a reputation for innovation."

The acquisition is expected to close in the third quarter, subject to bankruptcy court approval, Westinghouse said.

"We look forward to bringing our significant expertise and reputation as a long-term owner and operator of critical infrastructure in the US and globally ... to enhance the Company's position as a leading global infrastructure services provider to the power generation industry," Madon added.

source: AFP