Toshiba to pay $3.7bn in guarantees to US utility firm
TOKYO (Kyodo) -- Toshiba has agreed to pay $3.68 billion in guarantees to Southern Co. over the construction of two unfinished nuclear reactors that were being built by the Japanese conglomerate's now-bankrupt nuclear unit, the company said Saturday.
Under the agreement sealed Friday, Toshiba will pay parent-company guarantees to the U.S. utility firm in installments from October this year through January 2021.
Toshiba concluded a parent-company guarantee contract with Southern when the company's affiliate Westinghouse Electric Co. received an order in 2008 to construct two nuclear reactors in Georgia.
The payment will have no impact on its provisional earnings results released last month without auditor's approval, Toshiba said.
The financially troubled company projects its group net loss to have widened considerably to a record 950 billion yen in the year ended March, putting it in the red for the third consecutive year, hurt by huge losses in its U.S. nuclear business.
Toshiba and Southern also agreed that the U.S. utility will not ask for more guarantees exceeding the value concluded in Friday's agreement. If construction expenses turn out to be lower than expected, Toshiba will receive some of the unused sum, it said.
"We are happy to have Toshiba's cooperation in connection with this agreement which provides a strong foundation for the future of these nuclear power plants," Southern CEO Thomas Fanning said in a statement.
The company is also in talks with another U.S. utility, South Carolina Electric & Gas, over two nuclear reactors that were being built by Westinghouse, which filed for Chapter 11 bankruptcy protection in March.