Summary
This 8-K filing by Southern Company (SO) on December 11, 2017, primarily addresses significant developments concerning the Plant Vogtle Units 3 and 4 nuclear construction project. The core of the announcement revolves around an amendment to a settlement agreement with Toshiba Corporation, related to Toshiba's guarantee of obligations for Westinghouse Electric Company, the former contractor for the nuclear units. This amendment accelerates the payment schedule for Toshiba's remaining obligations, consolidating them into a single payment due by December 15, 2017. Specifically, Toshiba's remaining guaranteed obligation is approximately $3.225 billion, with Southern Company's proportionate share being about $1.47 billion. If Toshiba makes this payment by the deadline, it will receive certain bankruptcy claims against Westinghouse. The amendment also involves the surrender of letters of credit and received consent from the U.S. Department of Energy for these actions under the existing loan guarantee agreement. Investors should monitor the December 15, 2017 deadline closely, as Toshiba's payment will determine the next steps and potential financial implications for Southern Company and the project.
Key Highlights
- 1Southern Company's subsidiary, Georgia Power, has entered into an amendment to a settlement agreement with Toshiba Corporation regarding Toshiba's guarantee for the Plant Vogtle Units 3 and 4 nuclear project.
- 2The amendment accelerates Toshiba's remaining payment obligations under the guarantee, consolidating them into a single payment due by December 15, 2017.
- 3Toshiba's total remaining scheduled payment obligation is $3.225 billion, with Georgia Power's share being approximately $1.47 billion.
- 4If Toshiba makes the full payment by December 15, 2017, it will acquire certain pre-petition bankruptcy claims against Westinghouse held by Georgia Power and other Vogtle Owners.
- 5Upon Toshiba's payment, Georgia Power and other Vogtle Owners will surrender previously issued letters of credit totaling $920 million.
- 6The U.S. Department of Energy has provided consent for Georgia Power to enter into this settlement amendment and related actions, including the release of collateral under the loan guarantee agreement.