Westinghouse Electric plan confirmed; sale to close in third quarter

By Caroline Salls

Pittsburgh, March 27 – Westinghouse Electric Co.’s plan of reorganization was confirmed Tuesday by the U.S. Bankruptcy Court for the Southern District of New York, according to a company news release.

The company said its previously announced $4.6 billion sale to Brookfield Business Partners LP is expected to close in the third quarter, subject to customary closing conditions including regulatory approvals.

“Confirmation of our plan of reorganization is one of the final steps in the completion of our strategic restructuring,” president and chief executive officer José Emeterio Gutiérrez said in the release.

“We are on track to fulfill our promise to emerge from this strategic restructuring process as a stronger business partner while retaining our primary focus on safety.”

The company said the plan provides for a global settlement of all disputes among the Westinghouse debtors, the direct and indirect non-debtor subsidiaries of affiliates TSB Nuclear Energy Services Inc. and TNEH UK and their key creditor constituencies.

As part of the Brookfield transaction, investor Brookfield WEC Holdings LLC will provide $3.8 billion in cash and cash consideration to fund the plan process in exchange for the acquisition of 100% of the equity interests in Westinghouse Electric Holdings UK Ltd. held by TNEH UK and the equity interests in the reorganized U.S. holding company.

The plan investment transaction also provides for the assumption of $770 million of liabilities.

On the plan effective date, a winddown company will deposit cash or cash equivalents equal to $1.15 billion into a segregated account to be used for distributions to holders of general unsecured claims.

Based on the plan investment proceeds, the company’s analysis of claims and settlements included in the plan, Westinghouse previously said it believes that holders of class 3A general unsecured claims will receive distributions “at or just below 100%” of their claims.

Meanwhile, holders of class 3B general unsecured claims will receive a share of 100% of the membership interests in the winddown company.

Holders of U.S. holding company and TNEH UK interests will receive no distribution.

Intercompany interests will be reinstated, settled, offset, cancelled, extinguished or eliminated, including by way of capital contribution, at the option of the debtors.

Priority claims will be paid in full in cash.

Holders of secured claims will either be paid in full in cash, receive the collateral securing the claim or have the claim reinstated.

Westinghouse, a Cranberry Township, Pa.-based nuclear products and services company and a subsidiary of Toshiba, filed bankruptcy on March 29, 2017. The Chapter 11 case number is 17-10751.

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