Shaw (SHAW) Unit to Exercise Put Options to Sell Westinghouse Back to Toshiba
Tweet Send to a FriendGet Alerts SHAW Hot Sheet
Up)
Trade SHAW Now!
The Shaw Group Inc. (NYSE: SHAW) today announced its special purpose subsidiary, Nuclear Energy Holdings L.L.C., intends to exercise put options to sell its investment in Westinghouse back to Toshiba Corp. Nuclear Energy Holdings received the put options in connection with its 2006 acquisition of 20 percent of the shares in the companies referred to as the Westinghouse Group.
The exercise of the Japanese yen-denominated put options prior to October 2012 requires the consent of the trustee acting on behalf of the bond holders of the yen-denominated bonds that were issued in connection with the funding of the acquisition of the Westinghouse shares. Since the acquisition, the yen-denominated debt has increased by approximately $600 million to a total of almost $1.7 billion.
Under the terms of the put option agreements, if consent to redeem the bonds early is not granted, the put options will be exercised automatically on Oct. 6, 2012, for cash settlement on Jan. 4, 2013. Proceeds from the sale would be used to repay the bonds in full on their scheduled maturity date of March 15, 2013.
The put options require Toshiba to purchase the shares at a price equivalent to not less than 96.7 percent of the principal amount of the bonds. Nuclear Energy Holdings will fund up to the 3.3 percent shortfall of the principal amount of the bonds, which was approximately $55.4 million at Aug. 31, 2011. Shaw may recognize a non-operating gain once the put options are settled resulting principally from foreign exchange movements. At Aug. 31 exchange rates and assuming early exchange, the gain would have been approximately $545 million pre-tax. The actual gain or loss will be determined at settlement.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The exercise of the Japanese yen-denominated put options prior to October 2012 requires the consent of the trustee acting on behalf of the bond holders of the yen-denominated bonds that were issued in connection with the funding of the acquisition of the Westinghouse shares. Since the acquisition, the yen-denominated debt has increased by approximately $600 million to a total of almost $1.7 billion.
Under the terms of the put option agreements, if consent to redeem the bonds early is not granted, the put options will be exercised automatically on Oct. 6, 2012, for cash settlement on Jan. 4, 2013. Proceeds from the sale would be used to repay the bonds in full on their scheduled maturity date of March 15, 2013.
The put options require Toshiba to purchase the shares at a price equivalent to not less than 96.7 percent of the principal amount of the bonds. Nuclear Energy Holdings will fund up to the 3.3 percent shortfall of the principal amount of the bonds, which was approximately $55.4 million at Aug. 31, 2011. Shaw may recognize a non-operating gain once the put options are settled resulting principally from foreign exchange movements. At Aug. 31 exchange rates and assuming early exchange, the gain would have been approximately $545 million pre-tax. The actual gain or loss will be determined at settlement.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: Correct: Buying Warner Chilcott plc (WCRX) Seen as Takeover Defense by Actavis (ACT)
- Anaren (ANEN) Says Vintage Capital's Unsolicited $23/Sh Offer 'Inadequate'
- Accretion to Actavis (ACT) from Warner Chilcott (WCRX) Deal Could Be Substantial - Jefferies
Create E-mail Alert Related Categories
Corporate News, Mergers and Acquisitions
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
