Toshiba keen to buy majority stake in NuGen project [Big News Network (United Arab Emirates)]
(Big News Network (United Arab Emirates) Via Acquire Media NewsEdge)
TOKYO Toshiba Corp, one of Japan's biggest diversified electronics groups, said it is in the final stages of buying a majority stake in a British nuclear power consortium NuGeneration Ltd.
Toshiba is in talks to buy part of the 50% stake GDF Suez has in the NuGen project, in addition to its planned acquisition of the other 50% of the consortium from Spanish utility Iberdrola, announced earlier this week, its president Hisao Tanaka said Thursday.
NuGen is a joint venture between Iberdrola and GDF Suez with 50-50 holdings.
Tanaka said a deal was expected as early as January and reiterated that his company wanted a majority stake in the nuclear project, due to be built at a site in Sellafield on England's northwest coast.
That would require purchasing part of the stake held by GDF Suez, Iberdrola's joint venture partner.
Toshiba also said it wanted GDF Suez to remain a partial owner of the project and its eventual operator.
"Our plan is to hold a majority stake in NuGen," Tanaka told reporters. "But we are not going to take 100%. We would like GDF Suez to remain as the operator."
He didn't specify the percentage it plans to buy from GDF Suez.
The Japanese giant, which makes everything from flash-memory chips to medical devices, is looking to revitalize its nuclear power business as the Fukushima Daiichi nuclear disaster has eroded demand in Japan, while interest in nuclear power has waned in North America due to the cheap natural gas supply.
Unlike some of its continental neighbors, Britain is moving to expand nuclear power, luring Asian nuclear power plant makers.
Japan's Hitachi Ltd. bought 100% of the Horizon Nuclear Power project in the U.K. last year, aiming to build its own nuclear reactors. China General Nuclear Power Group and the China National Nuclear Corp. are joining with French utility EDF on a separate British nuclear power plant project.
The plan to build a large nuclear-power station in northern England also comes as the U.K. government focuses on building new nuclear projects to help meet greenhouse gas emission-reduction targets.
Aging coal plants and old nuclear reactors are also set to be decommissioned over the next decade, writes WSJ.
Toshiba aims to build three units of its 1-gigawatt reactor called AP1000 through its US unit Westinghouse.
The company expects the value of manufacturing and building the three units around Yen 1.5 trillion ($14.37 billion), Tanaka said. Spanish utility Iberdrola, which is selling assets to reduce debt, said on Monday it has agreed to sell its 50 percent stake in NuGen to Toshiba for 85 million pounds ($139 million), subject to final approvals, terms and conditions.
Tanaka refused to confirm the details of Iberdrola's announcement. But he said that he expected to strike a final deal with both the Spanish firm and GDF Suez.
"We want a majority to move forward," Tanaka said. "So we would want to take some of GDF's share, but have them remain as an operator."
A controlling stake would allow Westinghouse, 87 percent-owned by Toshiba, to supply three of its AP1000 reactors for the site, where NuGen is aiming for capacity to produce 3.6 gigawatts of power.
After building the reactors, Toshiba would reduce its stake, Tanaka said.
"We are thinking about an exit, but we haven't decided anything yet. We will reduce our majority stake over time. We are a plant provider, not a nuclear power provider," he said.
Tanaka added that revenue from the project, including the reactors, was expected to be around 1.5 trillion yen ($14.4 billion).
Toshiba remains on the lookout for a buyer for 36 percent of Westinghouse, which would leave it with 51 percent control of the business.
But Tanaka reiterated that Toshiba was in no rush to complete a sale, after previously stating that it was looking for an engineering company with expertise in building nuclear plants.
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