Insider Economy Hitachi freezes British nuclear project, books $2.8 bln hit

Hitachi freezes British nuclear project, books $2.8 bln hit

Japan’s Hitachi Ltd said on Thursday it has decided to freeze a 3 trillion yen ($28 billion) British nuclear power project and will consequently book a writedown of 300 billion yen.

The suspension comes as Hitachi’s Horizon Nuclear Power failed to find private investors for its plans to build a plant in Anglesey, Wales, which promised to provide about 6 percent of Britain’s electricity.

“We’ve made the decision to freeze the project from the economic standpoint as a private company,” Hitachi said in a statement.

Hitachi had called on the British government to boost financial support for the project to appease investor anxiety, but turmoil over the country’s impending exit from the European Union limited the government’s capacity to compile plans, people close to the matter previously said.

Hitachi had called on the British government to boost financial support for the project to appease investor anxiety, but turmoil over the country’s impending exit from the European Union limited the government’s capacity to compile plans, people close to the matter previously said.

Hitachi had banked on a group of Japanese investors and the British government each taking a one-third stake in the equity portion of the project, the people said. The project would be financed one-third by equity and rest by debt.

The nuclear writedown wipes off the Horizon unit’s asset value, which stood at 296 billion yen as of September-end.

Hitachi stopped short of scrapping the northern Wales project. The company will continue to discuss with the British government on nuclear power, it said.

However, industry sources said hurdles to proceed with the project are high considering tighter safety regulations since a meltdown at Japan’s Fukushima nuclear power plant in 2011 drove up costs.

Analysts and investors viewed the suspension as an effective withdrawal and saw the decision as a positive step that has removed uncertainties for the Japanese conglomerate.

Hitachi bought Horizon in 2012 for 696 million pounds ($1.12 billion), from E.ON and RWE as the German utilities decided to sell their joint venture following Germany’s nuclear exit after the Fukushima accident.

Hitachi’s latest decision further dims Japan’s export prospects.

Toshiba Corp last year scrapped its British NuGen project after its U.S. reactor unit Westinghouse went bankrupt and it failed to sell NuGen to South Korea’s KEPCO.

Mitsubishi Heavy Industries Ltd has effectively abandoned its Sinop nuclear project in Turkey, a person involved in the project previously told Reuters, as cost estimates had nearly doubled to around 5 trillion yen.

(Reuters)

Top Stories

Cyprus to launch SMS campaign to avert migrant arrivals

    Cyprus is launching a multilingual SMS campaign to head off more migrant arrivals by dispelling the mistaken belief that it is a gateway to...

Deputy Minister participates in EU teleconferences on research, innovation and space issues

Cyprus' Deputy Minister for Research, Innovation and Digital Policy Kyriacos Kokkinos participated on May 29 in two informal teleconferences of the EU Ministers responsible...

Police book three restaurants for breaking distancing rule

  Three restaurants were booked after police carried out 642 checks from 6 pm on Sunday to 6 am on Monday at various businesses to...

GHS Phase Two gets underway with 85% of island’s doctors on board

Phase Two of GHS (Gesy) that incorporates inpatient services to the reform has begun as of today, June 1, with 85% of Cyprus' doctors...

Solar heater subsidy scheme launched

  The RES and Energy Conservation Fund is accepting applications for a scheme subsidising  solar heaters for water at residences for 2020. The scheme has a...

Taste

Local cuisine: An introduction

Rich in fresh ingredients and tasty herbs, offers the very best of Mediterranean culinary delights. Head out to a tavern and feast on a...

Spiced lamb with beetroot salad and scented yoghurt

Lay the lamb on a tray, skin side down. Rub with crushed garlic, sprinkle with spices and ground pistachios, wrap in plastic wrap and...

Easy seafood pasta with white wine sauce

Ingredients: 2-3 tbsp olive oil 1 garlic clove, chopped 2-3 tablespoons of whipped cream 1/3 cup white wine 300g spaghetti, roughly broken 300-400g of...

Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...