Cranberry Township, Pa. – July 31, 2017 – Westinghouse Electric Company announced today that it has reached a critical milestone in the Chapter 11 bankruptcy process by submitting its five-year business plan to the company’s debtor-in-possession (DIP) financing lenders and the unsecured creditors committee on July 27.
“We are proud to take this important next step. Our five-year plan provides Westinghouse stakeholders, including our employees, customers and future investors, insight into how we will achieve conservative, sustainable growth over the term,” said President and Chief Executive Officer José Emeterio Gutiérrez. “We have already begun to align our operations to the plan and look forward to moving through the Chapter 11 proceedings in a swift manner.”
The plan integrates Westinghouse’s strategic initiatives, competitive landscape and market dynamics into a five-year financial forecast. Comprised of strategic transformation initiatives resulting in savings of $205 million in run rate earnings before interest, taxes, depreciation and amortization (EBITDA) over the five-year term, the plan supports the successful operation of the company’s core businesses as well as the company’s New Projects Business. One component of these savings will be adjustment of the company’s global headcount; for fiscal year 2017 this will be approximately seven percent.
This milestone is another significant step in Westinghouse’s successful emergence from its Chapter 11 bankruptcy. Since filing for Chapter 11 on March 29, 2017, Westinghouse has obtained approval of an $800 million DIP financing package. Westinghouse has successfully negotiated a long-term services agreement with Southern Nuclear Co., an owner of one of the two U.S. AP1000 nuclear power plant construction projects.
Earlier today, the board of directors of Santee Cooper declared that they will not support the continued construction of the two Westinghouse AP1000 nuclear power plants currently under construction at the V.C. Summer site in South Carolina, USA.
Westinghouse is disappointed by the decision as the significant progress made on these two units – demonstrated by the recently completed installation of the entire nuclear steam supply system (NSSS) – will no longer go forward, limiting the ability of the citizens of South Carolina to have access to safe, clean and reliable energy. Westinghouse will work with SCANA, a valued customer, to determine the process under which safe and efficient project close-out is undertaken. Westinghouse will evaluate the implications of this decision on its business plan and its announced headcount adjustment in the normal course.
“While we respect Santee Cooper’s decision, we are extremely disappointed,” said José Emeterio Gutierrez, Westinghouse president and chief executive officer. “The South Carolina economy is sure to feel the negative impact of losing over five thousand high-paying, long-term jobs, as well as not having available the reliable, clean, safe and affordable energy these units would provide. Also, at a time when other nuclear plants are being retired, the U.S. energy sector is sure to feel the stunting impact of walking away from these two nuclear units.”
Westinghouse applauds the steadfast work completed to date by the project’s team. Meanwhile, the many benefits of the AP1000 plant design, including its passive safety features and strong licensing pedigree, continue to be recognized worldwide. Work continues on two AP1000 units at Georgia Power’s Vogtle site, under a long-term services agreement, and the world’s first four AP1000 units are nearing successful completion at the Sanmen and Haiyang sites in China.