Toshiba sells Westinghouse stake to Kazatomprom

Toshiba sells Westinghouse stake to Kazatomprom | Reuters

  Mon Aug 13, 2007 7:15AM EDT 

By Olzhas Auyezov

ALMATY (Reuters) – Japan’s Toshiba Corp. (6502.T: Quote, Profile, Research) sold a 10 percent stake in U.S. nuclear power plant builder Westinghouse to Kazakh uranium producer Kazatomprom for $540 million on Monday.

The deal underscores the Central Asian state’s growing clout. Japan generates 25 percent of its electricity from nuclear power and has been courting Kazakhstan as a uranium supplier.

“Through this deal Kazatomprom plans to enter new markets for its products,” the companies said in a joint statement. “Toshiba aims to enhance its global nuclear power business.”

The shares are expected to be transferred to state-owned Kazatomprom in about a month, the companies said, but the deal is also subject to approval by U.S. and Japanese regulators.

Greenpeace and other environmental groups have written to the U.S. Committee on Foreign Investment in the United States (CFIUS) asking them to reject the Kazatomprom bid.

The letter said the sale would undermine efforts to limit nuclear proliferation “and will give sensitive nuclear technology to a brutal, repressive and undemocratic regime, which may lack long-term legitimacy and stability”.

The United States is the biggest single foreign investor in Kazakhstan, notably in the oil sector through Chevron’s interest in the massive Tengiz oilfield, and enjoys warm relations with President Nursultan Nazarbayev, in power since 1989.

Asked at the signing ceremony about the environmentalists’ letter to CFIUS, Kazatomprom President Mukhtar Dzhakhishev dismissed the challenge.

“I can only advise these people to watch Disney cartoons instead of movies like Borat,” he told reporters.

Toshiba, Japan’s second-largest maker of industrial electronics, bought a 77 percent stake in Westinghouse, the U.S. power plant unit of British Nuclear Fuels, for $4.16 billion late last year.

The stake was much larger than initially planned after Japanese trading house Marubeni Corp (8002.T: Quote, Profile, Research) decided not to invest in the project. Toshiba has since been looking for new investors to share the financial burden.

Dzakhishev said Kazatomprom was financing the deal from its own funds.

The company holds about 10 percent of the global uranium market and plans to grow to 40 percent by 2016-2017. It has joint ventures with foreign firms and plans to open new mines as part of a plan to triple annual uranium production to 17,500 tonnes by 2015.

© Reuters 2007. All rights reserved.

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