Toshiba to take Westinghouse shares off IHI's hands
Embattled Japanese conglomerate to fork over Y18.9 billion
TOKYO -- Toshiba will buy IHI's 3% stake in Westinghouse Electric at the request of the Japanese heavy industry group, which seeks to avoid exposure to the U.S. nuclear company whose corporate value has been severely diminished due to a massive write-down.
Toshiba revealed Friday that the roughly 18.9 billion yen ($167 million) transaction will be executed as of May 17. It will raise the company's stake in Westinghouse to 90%. The Japanese multinational conglomerate said the deal will reduce shareholders' equity and net assets "to some degree," though the company did not specify how much or when the impact will be recorded.
The terms of IHI's investment in Westinghouse give the minority shareholder the right to sell its stake to Toshiba on or after Oct. 1. But the terms also include a clause that allows the put option to be exercised before that date under certain conditions.
The sale is not expected to affect the business partnership between Westinghouse and IHI, which supplies equipment such as containment vessels to the nuclear company.
The remaining 10% of Westinghouse is owned by Kazatomprom, a state-owned Kazakh nuclear fuel producer, which has a similar put option that it could exercise. Toshiba said it "cannot answer" any questions about Kazatomprom's plans.
Toshiba earlier expressed an intention to cut its Westinghouse stake in line with the conglomerate's decision to scale back its overseas nuclear operations.