Westinghouse Electric Co on 29 March 2017 filed for Chapter 11 protection from creditors to enable strategic restructuring amid "financial and construction challenges" in its US nuclear power plant projects.

Existing letters of credit (L/Cs) have been cash collateralised while the new financing package contemplates new L/Cs.


Westinghouse has obtained US$800 million in debtor-in-possession (DIP) financing from a third-party lender to help fund and protect its core businesses during its reorganisation. The DIP financing will fund Westinghouse's core businesses of supporting operating plants, nuclear fuel and components manufacturing and engineering as well as decommissioning, decontamination, remediation and waste management.

L/C implications

According to a statement issued by Westinghouse, existing L/Cs have been cash collateralised in full and will remain in place. The company has also said the financing will allow for new L/Cs to be issued.

Earlier in March, Municipal Electric Authority of Georgia (MEAG) said it was eyeing L/Cs as compensation should Westinghouse fail to deliver to the authority a nuclear power plant it is building (DC World News, 27 March 2017).

Under its reorganisation plans, the company anticipates delivering the nuclear plant for MEAG and, if it is delivered, the electricity authority will not need to draw upon L/Cs that guarantee the plant's construction.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.