Westinghouse Electric Co.’s financial distress sparked a feeding frenzy among Wall Street lenders keen to give the nuclear developer a lifeline while it reorganizes in bankruptcy, Reuters reported. Westinghouse, the nuclear arm of Japanese conglomerate Toshiba, filed for chapter 11 bankruptcy protection yesterday after facing billions of dollars in cost overruns at power plants under construction in Georgia and South Carolina. It has a proposal in hand for $800 million in bankruptcy financing from the credit arm of Apollo Global Management, which must be approved by a bankruptcy judge. The private equity firm won the high-profile deal after Westinghouse said it was "inundated" with offers from investment banks, private equity houses and hedge funds for the financing, a so-called "debtor-in-possession" (DIP) loan, Westinghouse's turnaround adviser said in court papers. Read more.
In related news, Toshiba Corp. shareholders, some of them in tears, denounced management at a shareholders’ meeting today outside Tokyo and asked why Toshiba had plowed billions of dollars into a now-bankrupt U.S. nuclear business, the Wall Street Journal reported. The event took place less than 24 hours after a chapter 11 bankruptcy filing by Westinghouse Electric Co., a U.S. nuclear plant builder 87 percent-owned by Toshiba that suffered huge cost overruns on U.S. projects. Toshiba said that it expected to record a loss of about $9 billion in the year ending March 31. It said the bankruptcy filing would allow it to separate Westinghouse from the Toshiba group and put a cap on losses. Read more. (Subscription required.)
