Toshiba Agrees To Sell Westinghouse Assets

(RTTNews) - Japanese conglomerate Toshiba Corp. (TOSYY.PK, TOSBF.PK) agreed to sell claims in its Westinghouse U.S. nuclear unit to bolster its capital by 410 billion yen or $3.68 billion by March.

Toshiba plans to complete the sale of the claims to an entity controlled by the Baupost Group LLC this month. The deal will generate after-tax profit of 170 billion yen.

The sale will end the Japanese conglomerate's troubled foray into overseas nuclear power, which started with the $5.4 billion acquisition of Westinghouse in 2006. Two power projects went billions of dollars over budget and years behind schedule, forcing the U.S. entity to seek bankruptcy protection in March. The resulting multibillion-dollar losses pushed Toshiba's liabilities beyond its level of assets, threatening its listing on the Tokyo Stock Exchange. Toshiba was forced to put its semiconductor business up for sale to plug the hole in its balance sheet.

Separately, under the terms of the deal, Toshiba will sell all shares it holds in Toshiba Nuclear Energy Holdings (US) Inc. and Toshiba Nuclear Energy Holdings (UK) to BWH, an affiliate of Brookfield Business Partners LP and its affiliates, Westinghouse's proposed new owner, for the sale price of US$1 or about 113 yen. With the goal of completing the sale of the Westinghouse-related Shares by the end of March 2018, the parties, together with the cooperation of Brookfield and Westinghouse, will seek regulatory approvals or determination necessary for the sale to close. Brookfield will not acquire control of Westinghouse through the transactions contemplated by the SPA.

The nuclear asset sale and 600 billion yen raised in December through new share issuance together will resolve its capital shortage by the end of its fiscal year, Toshiba said in the statement.