VanEck Vectors Uranium Plus Nuclear Energy ETF (NLR)

[3xBuBu]

Brookfield Business Partners to buy Westinghouse for $4.6 billion

The Brookfield group of companies is among the world’s largest investors in stable, long-lived assets such as utilities, real estate, energy and infrastructure.
https://ca.reuters.com/article/businessNews/idCAKBN1ET1MQ-OCABS

A subsidiary of Canada’s Brookfield Asset Management Inc BAMa.TO BAM.N plans to acquire Westinghouse Electric Co LLC, the bankrupt nuclear services company owned by Toshiba Corp 6502.T, for $4.6 billion.

Brookfield Business Partners LP BBU.N BBU_u.TO said in a statement on Thursday that it and institutional partners would use $1 billion of equity and $3 billion of long-term debt financing to buy the Pittsburgh-based business, its first investment in nuclear power.

The buyers are also assuming Westinghouse’s underfunded pension plan.

New York-listed shares of Brookfield Business Partners were up 3.4 percent in afternoon trading.

The deal is expected to close in the third quarter but will require approval from regulators and the U.S. Bankruptcy Court.

Westinghouse has said it is aiming to exit bankruptcy as soon as March, which would allow Toshiba to book tax benefits in the current fiscal year.

Schneider said he was surprised that Brookfield acquired Westinghouse, given that the company has no other nuclear businesses.

Westinghouse is one the world’s leading suppliers of nuclear fuel, and it provides some form of service to 80 percent of the world’s 450 commercial reactors, according to court records.

Those two business lines generated combined cash flow of $403 million on revenue of about $3.1 billion in Westinghouse’s 2015 financial year, according to court records.

However, the company suffered after it agreed to build two plants in the U.S. Southeast on fixed-price contracts. The project went billions of dollars over budget, and Westinghouse filed for bankruptcy in March to escape the contracts.

Construction of new nuclear power plants globally has dropped to the lowest level in a decade following renewed safety concerns after the Fukushima disaster in Japan in 2011.

One of Westinghouse’s unfinished U.S. projects, known as Vogtle in Georgia, will continue with Southern Co SO.N replacing the company as the project manager. A South Carolina project known as V.C. Summer was abandoned in July.

The lead utility behind the V.C. Summer project, Scana Corp SCG.N, agreed on Wednesday to a $7.9 billion takeover bid from Dominion Energy Inc D.N.

Westinghouse has joined a consortium bidding to provide nuclear power in Saudi Arabia, one of the biggest new markets in the world. Bringing Westinghouse out of bankruptcy could help close a proposed deal for six of the company’s new AP1000 reactors in India.