Staff and Wire Reports
BATON ROUGE, La. - Engineering and construction company The Shaw Group Inc. will sell its minority investment in nuclear power plant company Westinghouse Electric Co. LLC back to Toshiba Corp.
The sale will help Shaw shed some debt and strengthen its balance sheet. But it also means that there will no longer be any U.S. investors in Westinghouse, which is more than 100 years old and operates a training facility at the Centre South Riverport in Chattanooga.
While Toshiba is taking a larger stake in Westinghouse, the Japanese company said it "remains open to the idea" of inviting in new investors if they share its long-term vision and business strategy for Westinghouse.
Shaw said that it is still under contract with Westinghouse for six U.S. nuclear power plants and four plants under construction in China.
The Baton Rouge, La., company also expects to continue to work with Westinghouse and Toshiba on certain projects.
Westinghouse said in a statement that Shaw's sale of its minority stake will not affect U.S. plants. Its plants in China are expected to be operational starting in 2013.
Westinghouse took over a part of what was once the former Combustion Engineering Corp., which employed more than 5,600 employees in Chattanooga at its peak in the 1970s.
Alstom Power acquired what was C-E's boiler production facility and Westinghouse took over the engineering support functions.
Westinghouse built a $21 million training and office facility in the Centre South Riverport in Chattanooga in 2008 and employs more than 150 employees in training workers for boiling water reactors.
Alstom, which is based in Paris, recently completed a $300 million expansion of its riverfront complex in Chattanooga.
Shaw subsidiary Nuclear Energy Holdings LLC obtained a 20 percent stake in Westinghouse in October 2006 for $1.08 billion, while Toshiba purchased a 77 percent interest from the U.K.'s British Nuclear Fuels PLC for $4.2 billion and Japanese heavy machinery maker IHI Corp. bought the remaining 3 percent. Toshiba later sold 10 percent of its interest to Kazatamprom, a company based in Kazakhastan.
Once Shaw sells its Westinghouse stake, Toshiba will have an 87 percent interest in Westinghouse.
Shaw didn't cite a price for its Westinghouse stake. But it said by selling its stake, it would get rid of about $1.7 billion in debt. Recently, the drop in the U.S. dollar versus the yen has negatively affected the Westinghouse segment, because Shaw used bonds denominated in yen to finance its investment in the business.