Apollo provides Westinghouse $800m bankruptcy financing

The Toshiba-owned firm experienced a “liquidity drain” after US projects stalled.

Westinghouse Electrical Company has won approval to tap $800 million in bankruptcy financing from Apollo Global Management, a court order filed last Friday shows.

Westinghouse will utilise the revolving loan facility in order to fund current operations while the company restructures, according to a motion filed on Wednesday with US Bankruptcy Court Southern District of New York documents.

The debtor-in-possession financing provides senior secured loans priced at either a to-be-determined base rate plus 5.25 percent or LIBOR plus 6.25 percent, records show. Covenants on the facility include a minimum liquidity of $100 million cash on a weekly basis, a business plan shared with the lender, and a minimum EBITDA of $350 million.

Citibank is administrative agent on the facility, which has a scheduled termination of 12 months after issuance.

The DIP facility will help the company make payroll and continue to pay suppliers and regulatory agencies. Toshiba, which has had a majority stake in the company since 2006, will also provide liquidity.

Apollo financed the facilty from multiple investment funds, sources familiar with the matter told Private Debt Investor. The transaction marks the largest from its credit arm

An Apollo spokesman declined to comment.

The nuclear power supplier filed for chapter 11 bankruptcy last week mostly because of the “liquidity drain caused by Westinghouse’s obligations related to construction of US AP1000 Projects”.

Construction of nuclear reactor projects in Georgia and South Carolina has seen higher than expected costs and delays during an inopportune season of typically peak energy demand, the documents said.

Despite its recent financial strains, most of the company’s nuclear fuel and power plant businesses remain “very profitable,” according to the court records. Westinghouse manages more than half of the world’s nuclear power plants, servicing 430 plants around the globe.

Apollo specifically targets restructuring-related deals or distressed opportunities as part of its overall investment strategy. The firm managed $192 billion in assets as of 31 December.