Published: Fri, January 12, 2018
Money | By Armando Alvarado

Canada's Brookfield buys Westinghouse's global nuclear arm

Canada's Brookfield buys Westinghouse's global nuclear arm

Ten months after Westinghouse Electric Company filed for bankruptcy protection, putting in jeopardy its construction work on two new nuclear power plants with AP1000 reactors for South Carolina Electric & Gas Company (SCE&G) in Jenkinsville, S.C., and two others for Georgia Power Company (owned by Southern Company) near Waynesboro, Ga., the company announced January 4 that it "has agreed to be acquired by Brookfield Business Partners L.P. together with institutional partners" for approximately $4.6 billion. Mackenzie Financial Corp lifted its position in shares of Brookfield Business Partners L.P. Limited Partnership Units by 7.9% during the third quarter. A portion of Brookfield Business Partners' investment may be syndicated to other institutional investors. The purchase was expected to be funded with about $1bn of equity and about 4£bn of long-term debt, with the balance to come from "operating obligations".

Representatives for Blackstone and Apollo weren't immediately available for comment.

Despite problems with two US nuclear projects, Brookfield says the company is a leader in providing nuclear infrastructure and operates within a complex regulatory and licensing environment requiring depth of expertise and capability.

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One of Westinghouse's unfinished US projects, known as Vogtle in Georgia, will continue with Southern Co. replacing the company as the project manager. The project went billions of dollars over budget, and Westinghouse filed for bankruptcy in March to escape the contracts.

An affiliate of Canadian alternative investment firm Brookfield Asset Management said this week it would acquire Westinghouse Electric Co LLC, the bankrupt nuclear services company owned by Toshiba Corp, for US$4.6 billion ($5.7 billion), Reuters reported. Brookfield also agreed to buy significant assets in the wind and solar energy industry that had been ensnared in SunEdison Inc.'s bankruptcy.

Westinghouse supplies nuclear fuel and other services to 80% of the world's 450 commercial reactors -.two business lines which generated combined cash flow of $403 million on revenue of about $3.1 billion. Instead, delays and overruns led to troubles that left Westinghouse's former parent, Toshiba Corp., fighting for survival a year ago after writing down the value of the unit by billions.

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