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August 02, 2019  

Westinghouse Mulling Nuclear-Power Deal

Westinghouse Electric is exploring securitization.

What’s known at this point is that the bonds would be backed by cashflows from the company’s nuclear-power division. The exact nature of the receivables remains uncertain, however.

Westinghouse’s nuclear-power unit constructs plants and supplies fuel for energy companies, and handles services including maintenance and instrumentation. It currently is building eight generation facilities in the U.S. and China.

While the timing of a potential offering is unknown, a search by Westinghouse for a capital-markets professional suggests it is highly interested in moving forward. Indeed, the recruit would work in the company’s Cranberry Township, Pa., headquarters as a treasury manager whose duties would include the implementation of a securitization program. A Westinghouse spokesperson declined to comment.

Among Westinghouse’s projects was a 2009 contract to build two nuclear reactors for South Carolina Electric & Gas — an undertaking that SCE&G financed in part by adding fees to its customers’ bills. But construction halted in 2017, leading to a series of legal actions that ultimately saw SCE&G parent Dominion Energy agree to pay $2.2 billion to the South Carolina Public Service Commission and ratepayers.

Now, the South Carolina assembly is considering a bill that would allow the company to recoup money associated with the project in part by issuing asset-backed bonds. Those securities would be separate from any sold by Westinghouse.

The current version of Westinghouse began to form when the former Westinghouse Broadcasting took over CBS Corp. and, in 1997, adopted the CBS name while establishing Westinghouse Electric as a licensing subsidiary. The nuclear-power division launched in 1999 and in 2006 was sold to Toshiba along with the Westinghouse Electric brand.

Westinghouse Electric then filed for bankruptcy in March 2017 amid $9 billion of losses tied to failed nuclear projects, including the two plants in South Carolina. It emerged from bankruptcy in 2018 with a new owner, Brookfield Business Partners.