SCE&G monetizes guaranty settlement payments from Toshiba
September 28, 2017
South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation, announced that it, along with Santee Cooper, has sold to Citibank all future guaranty settlement payments, due after the October 2017 payment of $150 million ($82.5 million for SCE&G’s 55% share) from Toshiba Corporation. These guaranty settlement payments from Toshiba were originally established as part of a definitive agreement entered into in July of 2017 and totaled $2.168 billion (approximately $1.192 billion for SCE&G’s 55% share) payable over five years in full satisfaction of its guaranty of obligations of Westinghouse Electric Company, LLC (WEC) under the engineering, procurement, and construction contract for the new nuclear project at the V.C. Summer Nuclear Station in Jenkinsville, SC.
Excluding the October 2017 payment of $150 million from Toshiba, Citibank paid $1,847,075,400(approximately $1.016 billion for SCE&G’s 55% share) or approximately 91.5% of the total amount of the guaranty settlement payments sold. The total of the payment from Citibank and the $150 millionanticipated to be received from Toshiba in October of 2017 is approximately 92% of the $2.168 billionpayable under the settlement agreement. The sale to Citibank includes the claims of SCE&G and Santee Cooper in the WEC bankruptcy.
The monetization mitigates the credit risk associated with receiving the payments from Toshiba over a five year period and ensures that these funds are available to mitigate costs of the abandoned project for SCE&G’s customers.
“With Toshiba still facing challenges, we believe this was a crucial step to mitigate the risk and realize the value of these payments for the benefit of our customers,” said SCANA Chairman and CEO, Kevin Marsh. “The guaranty settlement payments from Toshiba, as the parent company of Westinghouse, are payable due to the failure of Westinghouse to deliver on its fixed price commitment on our new nuclear project. This transaction allows us to ensure these payments are not subject to further credit risk. As we have consistently communicated, SCE&G intends to utilize the net value of these payments to mitigate the cost of the abandoned project to customers.”
“Additionally, we hope that we will be able to engage in a discussion for a comprehensive settlement of the issues related to the project and how to further mitigate the impact on our customers. This transaction is a critical piece of that process.”
SCANA Corporation, headquartered in Cayce, S.C., is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses. The Company serves approximately 718,000 electric customers in South Carolina and approximately 1.3 million natural gas customers in South Carolina, North Carolina and Georgia. Information about SCANA and its businesses is available on the Company’s website at www.scana.com.
SCE&G is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 718,000 customers in South Carolina. The company also provides natural gas service to approximately 362,000 customers throughout the state. More information about SCE&G is available at www.sceg.com.
