Toshiba opens door to alternative buyers for NuGen nuclear unit

Toshiba opens door to alternative buyers for NuGen nuclear unit

Kana Inagaki in Tokyo, Sylvia Pfeifer in London and Jung-a Song in Seoul 

17 HOURS AGO

Toshiba has opened the door to alternative buyers for its British nuclear operations after repeated delays to seal a final agreement with Korea Electric Power Corp, raising doubts over the future of the Moorside nuclear power station in Cumbria.

An artist’s impression of how the Moorside nuclear plant in Cumbria could look if built. Photograph: NuGeneration Limited/PA

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The Japanese group said South Korea’s Kepco no longer had “priority negotiation rights” over the purchase of the NuGen unit and that it would study alternative options in consultation with the UK government and other stakeholders. Talks with Kepco, however, were still continuing over a potential deal, said a spokesperson.

Kepco was chosen as the preferred bidder of NuGen in December last year after the unit was put up for sale by Toshiba as part of its wider restructuring in the wake of a financial crisis triggered by losses in its Westinghouse US nuclear business. The expectation at the time had been for a final agreement to be sealed by the middle of this year.

The persistent delays, however, have prompted NuGen to undertake a review of its operations, raising the prospect of job losses. The company has around 60 direct employees, mostly based in Manchester, as well as around 40 contractors. NuGen will start a 30-day consultation period from August 1, a spokesperson confirmed on Monday.

“Toshiba has pursued a sale of NuGen to Kepco and the prolonged time it has taken reach a conclusion has required NuGen to undertake a review,” he said. “As such additional options are being pursued for NuGen’s future direction to deliver the next generation of nuclear new build in the UK. It has been decided by the NuGen board to re-profile the organisation at this point.”

News of the potential job losses, first reported in The Guardian newspaper, raises doubts over the future of plans for the Moorside nuclear power station. Representatives from the South Korean company met with officials from the Department for Business, Energy and Industrial Strategy on Monday, according to people close to the negotiations.

The UK government is considering alternative funding models for new reactors after concerns over the high cost of the Hinkley Point C station under construction in south-west England by France’s EDF. One model under review is for private investors to secure a return on a nuclear plant’s so-called regulated asset base.

A deal would give Kepco a foothold in one of the few developed nations committed to renewing its fleet of ageing nuclear power stations. Kepco was unavailable for comment on Monday.

A spokesperson for the Department for Business, Energy and Industrial Strategy, said: “We continue to engage with new build developers, though the detail of these discussions is commercially confidential.”

https://www.ft.com/content/884120c8-940b-11e8-b67b-b8205561c3fe

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