Southern Company (SO)

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Southern’s Georgia Power concerned by Westinghouse bankruptcy loan

Southern Co. (SO +0.2%) subsidiary Georgia Power objects to Westinghouse Electric's proposed $800M bankruptcy loan, saying the financing could threaten construction of the Vogtle Electric Generating Plant, one of the first new nuclear reactors scheduled to be built in the U.S. in decades.

Westinghouse has pledged intellectual property as collateral for the loan deal, and if the loan goes through as planned, the company's lenders would be in position to "foreclose on the intellectual property, which could seriously disrupt or even potentially halt construction," lawyers for Georgia Power say in a court filing.

Owners of the Vogtle plant have been paying $5.4M per week to continue construction under an agreement struck with Westinghouse before it filed for bankruptcy March 29, and Georgia Power is supposed to decide by tomorrow whether to extend the agreement.

Another new Westinghouse reactor, the Virgil C. Summer Nuclear Generating Station, which is owned mostly by Scana (SCG +0.4%) subsidiary South Carolina Electric & Gas, also is being built.