Kepco Picked as Top Bidder for Toshiba's U.K. Atomic Project

(Bloomberg) -- Korea Electric Power Co. has been picked as the preferred bidder for Toshiba Corp.’s nuclear reactor project in the U.K. amid a push by the South Korean company to expand into the international market.

Kepco, as the utility is known, has started exclusive negotiations with Toshiba for NuGen, which is developing a nuclear power plant in northwest England’s Moorside, the company said in a statement Wednesday. Negotiations will take several months and the deal, which requires U.K. approvals, could be completed in the first half of next year, it said. A Toshiba spokeswoman confirmed the decision.

Toshiba has been looking to shed the Moorside project since taking multibillion-dollar losses on its now-bankrupt U.S. nuclear unit, Westinghouse Electric Power Co. NuGen had also drawn a bid from China General Nuclear Power Corp., which is also involved in the U.K.’s Hinkley Point C project.

A purchase by Kepco would be a boon for South Korea’s nuclear export program as it vies to succeed industry pioneers such as Westinghouse and Areva SA, which have become mired in cost overruns and construction delays. While South Korea is among only a few nations to have started up and exported advanced nuclear reactors, the government’s goal to phase out atomic power at home is seen hindering its overseas ambitions.

E&C Surge

Kepco Engineering & Construction Co., a subsidiary that designs nuclear plants, jumped as much as 24 percent to 29,100 won on Thursday, the biggest intraday move since September 2015. The company is expected to win about 600 billion won ($548 million) worth of contracts on plant designing services, Korea Investment & Securities said in a note Thursday.

Kepco rose as much as 2.7 percent to 39,500 won and traded at 38,950 at 10:13 a.m. in Seoul. The benchmark Kospi Index lost 0.3 percent.

Kepco last year fired up its first advanced homegrown reactor, known as the APR1400. In 2009, a Kepco-led group won a $20 billion contract to build four of the reactors in the United Arab Emirates. Kepco aims to export another six units by 2020.

If Kepco takes over Moorside, it may change the original NuGen plan to build three Westinghouse-designed AP1000 reactors. Dong-A Ilbo newspaper reported in July that NuGen notified Kepco that the U.K. government will allow it to adopt the APR1400 model. The development aims to complete a plant with about 3 gigawatts of capacity by around 2030, the company and the South Korean energy ministry said in statements Wednesday.

To contact the reporters on this story: Heesu Lee in Seoul at hlee425@bloomberg.net, Stephen Stapczynski in Tokyo at sstapczynsk1@bloomberg.net.

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Aaron Clark

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