Westinghouse, the US-based nuclear vendor which is due to supply the reactors for the proposed Moorside plant in Cumbria, has filed for bankruptcy protection at a court in New York.
The measure will enable the firm to undergo a “strategic restructuring” after it took a $6.1 billion (£4.9 billion) write-down on the acquisition of a nuclear construction company.
Westinghouse is seeking protection under chapter 11 of the US bankruptcy code, which allows debtors to retain control of their business whilst they come up with a plan to return to profitability under court supervision.
The firm has secured $800 million (£644 million) of financing from a third party to cover its costs during the reorganisation. Parent company Toshiba, which owns a 60 per cent stake in the NuGen consortium developing Moorside, has pledged to provide a further $200 million (£161 million) as a backstop.
“Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said Westinghouse interim president and chief executive José Emeterio Gutiérrez.
“We are focused on developing a plan of reorganization to emerge from chapter 11 as a stronger company while continuing to be a global nuclear technology leader.”
The plans for Moorside feature three of Westinghouse’s AP1000 reactors. The company said its UK operations will not be impacted by the bankruptcy procedure.
NuGen said it could not comment directly on the financial issues faced by Toshiba and Westinghouse. However, a spokesman for the consortium said in a statement: “NuGen is continuing to develop its Moorside Project to deliver three Westinghouse AP1000 reactors in West Cumbria.
“NuGen will continue in a ‘business as usual’ manner working in collaboration to gain the appropriate permits and licences required to construct Europe’s largest nuclear new build project, and will continue to increase value and attractiveness of the project to potential future investors, as we have always done.”
The fate of the 3.4GW project was cast into doubt in January when Toshiba revealed that the write-down on the acquisition of the US nuclear construction firm CB&I Stone & Webster by Westinghouse would amount to several billion dollars. The Japanese conglomerate said it was reviewing its overseas nuclear operations as a result.
A few weeks later Toshiba reaffirmed its commitment to the Moorside project but said it will take no role in the construction and will sell its share as soon as the plant is built. Around the same Reuters reported that the French firm Engie was looking to sell its 40 per cent stake in the development consortium.
Tim Yeo, chairman of the trade body New Nuclear Watch Europe, has told Utility Week investment from South Korean utility Kepco could save the development from potential collapse.