Toshiba Corp., expected to soon report huge losses on Georgia’s Vogtle nuclear plant expansion and a similar project in South Carolina, is backing away from its nuclear power plant business, according to a Japanese newspaper.
The Japan Times reported Saturday that Tokyo-based Toshiba will continue working on those projects, expected to be completed by 2020.
But it will stop taking new orders for nuclear plants, effectively marking its withdrawal from the nuclear plant construction business, the newspaper said.
Georgia Power, the managing partner and largest owner of the Plant Vogtle project, said it is monitoring the matter but expects Toshiba’s subsidiary involved in the project, Westinghouse Electric Co., to be able to complete the project.
“Under this agreement, Westinghouse has taken the actions required in connection with Toshiba’s financial condition,” Georgia Power spokesman Jacob Hawkins said.
He said Georgia Power’s agreement with Westinghouse requires the company to maintain a financial buffer in the form of $920 million in letters of credit.
“While we cannot speculate on what may happen in the future with Toshiba or Westinghouse and their overall business, we will always hold them, as the contractor, accountable for their responsibilities under our agreement,” Hawkins said.
The Japan Times, citing unnamed sources, said Toshiba chairman Shigenori Shiga may resign as soon as Feb. 14, when the company is expected to report financial results that could include a write-down of up to $6 billion related to its nuclear construction business.
Toshiba last week said it will review its nuclear business and sell its computer chip-making unit to raise money to cover the loss. Toshiba’s stock price has plunged and bond rating agencies have cut its debt ratings amid worries about the expected losses.
The Vogtle project, to add two new nuclear reactors at the plant near Augusta, is over three years behind schedule and more than $3 billion over budget.
Westinghouse is providing reactor parts to both the Vogtle expansion and a project in South Carolina owned by SCANA Corp.
In 2015, Westinghouse acquired the construction business building those plants, CB&I Stone & Webster, after Georgia Power reached a settlement shifting much of the costly Vogtle project’s risks onto the construction and supplier firms.
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