Louisiana-based engineering firm the Shaw Group on Tuesday said it would sell its 20% stake in nuclear plant company Westinghouse back to partner Toshiba—forcing the Japanese company to raise its holding to 87%. Shaw said it would continue to work as a consortium team member with Westinghouse in the deployment and commercialization of the third-generation AP1000 reactor currently under construction in China and the state of Georgia.

Shaw said it was exercising its option to sell its stake in Westinghouse primarily because of changes in the value of the Japanese yen. The company said its yen-dominated debt has surged by almost $600 million to a total of $1.7 billion since the acquisition. Paying off that debt increase would wipe out the expected gain from the stake sale—estimated at $545 million at the end of August—but it would leave the company with virtually no debt. The timing of the share acquisition has not yet been determined.

Toshiba said it understood Shaw’s decision to exercise the put option and sympathized with Shaw’s “substantial foreign exchange loss on the bonds” as a result of the recent significant appreciation of the Japanese yen against the U.S. dollar. The firm said it would remain open to the idea of inviting new investors in Westinghouse. “Several companies have already expressed an interest in investing in the company,” it claimed.

Toshiba and Shaw bought Westinghouse in October 2006 from the British government; the company’s other partners include Russian firm Kazatamprom and Ishikawajima-Harima Industries (IHI) of Japan, which hold 10% and 3% stakes, respectively.

Westinghouse has steadily expanded its businesses, winning orders for 10 units of its AP1000 pressurized water reactor in the U.S. and China.

Toshiba said the business would continue to flourish, even in the aftermath of the Great East Japan Earthquake. “Many countries and regions around the world, including the U.S.A, China, the U.K., India, Brazil and countries of Eastern Europe, have maintained their support for nuclear power as a means to achieve energy security and mitigate climate change and continue to promote a basic policy supporting construction of nuclear power plants,” the company said in a statement.

The companies are expected to work together on the four AP1000 reactors under construction in Sanmen, Guangdong province, and Haiyang in Zhejiang province, China as well as those under contract for construction at Southern Co.’s Plant Vogtle in Georgia, SCANA’s Summer site in South Carolina, and with Progress Energy in Levy County, Fla.

Westinghouse will also work with Shaw on an active joint bid for a new plant project in the UK, Westinghouse CEO Dr. Aris S. Candris said. “We believe the experience acquired through our work in China will help further ensure the timely construction and operation of AP1000 units under contract in the United States and help to secure our joint bid in the United Kingdom."

Shaw also said the sale would not affect its working relationships with Westinghouse or Toshiba. In addition to working with the companies on those project, it said it has a contract for technical support services on an additional two-unit AP1000 project in China that follows the original units at Sanmen and Haiyang. Shaw also said it would work with Toshiba on that company’s other third-generation advanced boiling water reactor (ABWR) projects. Toshiba developed the ABWR in cooperation with GE and Hitachi, but that partnership dissolved when Toshiba bought Westinghouse in 2006.

However, Toshiba said separately that though it would consider selecting Shaw for future construction and engineering work, it could also “consider selecting new partners on a project-by project basis”—particularly for projects in Europe, South America, and India where Westinghouse may be required to allow local companies to participate in such projects.

Sources: POWERnews, Toshiba, Westinghouse, Shaw Group, POWER