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LONDON, UK / ACCESSWIRE / July 31, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for SCANA Corp. (NYSE: SCG), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=SCG. South Carolina Electric & Gas Co. (SCE&G), the principal subsidiary of SCANA Corp., and state-owned Santee Cooper, announced entering into a definitive agreement with Toshiba Corp. on July 28, 2017. For immediate access to our complimentary reports, including today's coverage, register for free now at:

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Discover more of our free reports coverage from other companies within the Electric Utilities industry. Pro-TD has currently selected NextEra Energy, Inc. (NYSE: NEE) for due-diligence and potential coverage as the Company posted on July 26, 2017, its financial results for Q2 2017 in a news release available on the company's website. Tune into our site to register for a free membership, and be among the early birds that get our report on NextEra Energy when we publish it.

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As per the agreement, Toshiba will pay $2.168 billion in full satisfaction of its guaranty of obligations of Westinghouse Electric Company, LLC (WEC), under the parent Company guarantee obligation agreement of 2008. WEC filed for bankruptcy in March 2017 as it was over pressured by the cost overruns at the V.C. Summer plant in South Carolina and a similar unfinished nuclear project known as Vogtle in Georgia.

The aforementioned consideration is offered under the engineering, procurement, and construction contract (the EPC Contract) for the two new nuclear units at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina. Out of the $2.168 billion, SCE&G would receive $1.192 billion for its 55% project ownership and Santee Cooper $0.976 billion for its 45% ownership.

Payment Schedule and Conditions

  • As per the agreement, Toshiba has agreed to make payments in a series of installments from October 2017 to September 2022.
  • Some of these payments would be fulfilled by distributions through the bankruptcy court process from WEC to SCE&G and Santee Cooper.
  • These payments, however, are subject to reduction if WEC pays creditors holding liens on project assets.
  • An important thing to note is that Toshiba will be liable to make these payments regardless of whether both or either of the two nuclear units are completed, or the project is even abandoned.
  • If the units are completed and the actual construction costs (net of payment from Toshiba) are less than the specified maximum amount payable under the EPC Contract, Toshiba will have the right to receive part of the difference.

Significant Challenges in Project Completion

The project owners are putting in their best efforts for discovering the most prudent path forward for the nuclear project.

  1. At this point, the project owners expect that the additional cost to complete both units beyond the amounts payable in connection with the EPC Contract will considerably exceed prior WEC estimates as well as the Toshiba's guaranty settlement payments.
  2. As per the current tax rules, in order for the units to qualify for production tax credits, they would need to be online before January 01, 2021. However, project owners think that the units could not be brought online until after this date. They are thus considering these factors along with their future generation needs in their evaluation of the project.

Going by these considerations, the alternatives of completing either the two units or one of the units are subject to significant challenges. The owners are expected to announce their decision regarding the Westinghouse project soon.

Decision in the Best Interest of Customers

Kevin Marsh, Chairman, and CEO of SCANA Corporation announced that the Company is committed to making a financially responsible decision for its customers as well as other stakeholders. He mentioned that his team is close to completing the analysis of various options to determine the most prudent path forward.

Lonnie Carter, President, and CEO of Santee Cooper, had similar views. He appreciates customers' patience while the analysis on cost and schedule for the project is being completed. He mentioned that the Company would ultimately make a decision that is in the best interests of customers.

About SCANA Corp.

SCANA Corp. is headquartered in Cayce, South Carolina. It is an energy-based holding Company that majorly operates through its subsidiaries, in electric and natural gas utility operations and other energy-related businesses. They serve nearly 7,13,000 electric customers in South Carolina and around 1.3 million natural gas customers in South Carolina, North Carolina, and Georgia.

Last Close Stock Review

At the close of trading session on Friday, July 28, 2017, SCANA's stock price declined 6.63% to end the day at $61.29. A total volume of 2.47 million shares were exchanged during the session, which was above the 3-month average volume of 939.19 thousand shares. The Company's shares are trading at a PE ratio of 14.84 and have a dividend yield of 4.00%. At Friday's closing price, the stock's net capitalization stands at $9.38 billion.

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