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Westinghouse target out of Chapter 11 by early 2018

By Geert De Clercq and Susanna Twidale

Petroleumworld 09 18

U.S. nuclear reactor maker Westinghouse does not expect to come out of Chapter 11 bankruptcy proceedings before the end of 2017 but hopes to complete restructuring in early 2018, its CEO said.

Cost overruns at four nuclear reactors it was building in the United States pushed Westinghouse, a unit of Japan's Toshiba Corp, into bankruptcy in March.

Utilities in the U.S. state of South Carolina abandoned construction of two of those reactors in July.

Asked when the company could emerge from Chapter 11 proceedings, Westinghouse Chief Executive Officer Jose Gutierrez told Reuters: “The timeline is complicated, but it will obviously not happen this year.”

He said it could happen quickly once a solution was found for the remaining two U.S. reactors under construction in Georgia, adding that the rest of the firm was in good shape.

Southern Co, the utility building two reactors at Georgia's Vogtle plant, has hired Bechtel to finalise work and is in talks with Westinghouse about the nuclear part of the project, scheduled for completion by 2022, six years late.

“We are working with Southern to be sure that we can meet the new deadline that Southern has established,” Gutierrez said on the sidelines of the World Nuclear Association conference in London.

He said Toshiba was looking for a buyer with the help of investment bank PJT, but no formal talks were under way.

The nuclear industry is in crisis, as many nations turn away from nuclear power after the 2011 Fukushima disaster and as the cost of renewable power sources plummets, making it a challenge for Westinghouse to find a buyer.

Russian and Chinese firms would likely be vetoed by the U.S. government for strategic reasons. France's nuclear reactor supplier Areva is being rescued by the French state.

South Korea's Kepco has been cited as a possible buyer, but the new government in Seoul wants to curb nuclear use at home.

Gutierrez was more cautious about Westinghouse's outlook in China than a year ago, when he expected the first of four AP1000 being built there to start in early 2017 and the rest by 2018.

He said the Sanmen 1 reactor has been delayed due to new requests from the regulator and requests for small modifications by the customer. He said all four should be online next year.

“I think 2018 will be the year. I am preparing my luggage to take a plane and having a big celebration,” he said.

Once the first AP1000 goes online, he said the Chinese government would consider a plan to build six to eight more.

Additional plants would not be built by Westinghouse, which has transferred the technology to China, but the firm would be a contractor to provide some services.

Gutierrez said the India had confirmed an interest in buying six AP1000 reactors despite announcing plans in May to build 10 reactors of Indian design.

“We are continuing talks ... about delivery and financing models,” he said, adding any deal would involve India putting in place limits on vendor liability for nuclear accidents.

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