Westinghouse Electric Company, LLC, a U.S. company, and certain of its subsidiaries and affiliates, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code. The Company is seeking to undertake a strategic restructuring as a result of certain financial and construction challenges in its U.S. AP1000® power plant projects. Westinghouse has obtained $800 million in debtor-in-possession (DIP) financing from a third-party lender to help fund and protect its core businesses during its reorganization. The Chapter 11 filings took place in the U.S. Bankruptcy Court for the Southern District of New York in New York City.
“Today, we have taken action to put Westinghouse on a path to resolve our AP1000 financial challenges while protecting our core businesses,” said Interim President & CEO 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 DIP financing will fund Westinghouse’s core businesses of supporting operating plants, nuclear fuel and components manufacturing and engineering as well as decommissioning, decontamination, remediation and waste management as the company works to reorganize around these strong business units. Existing letters of credit have been cash collateralized in full and will remain in place. The financing will also allow for new letters of credit to be issued.
According to a press release from Toshiba, the company will provide maximum $200 million as a backstop guarantee of WEC Group’s Chapter 11 financing.
The Company has reached an agreement with each owner of the U.S. AP1000 projects to continue these projects during an initial assessment period. Westinghouse remains committed to its AP1000 technology as the industry’s premier Gen III+ nuclear power plant design, and will continue its existing projects in China as well as pursuit of other potential projects in the future.
Westinghouse’s operations in its Asia and Europe, the Middle East and Africa (EMEA) Regions are not impacted by the Chapter 11 filings. Customers in those regions will continue to receive the high-quality products and services they have come to expect in the usual course as the regions will also be supported by the DIP financing.
As part of the Chapter 11 filings, Westinghouse also filed several “first day” motions with the Court to ensure business continuity through payment of employee salaries, wages and benefits, as well as pay its suppliers for the delivery of services. The motions are expected to be approved by the Bankruptcy Court. Westinghouse is represented by Weil, Gotshal & Manges LLP in its Chapter 11 cases.