Hitachi Ltd. is in the final stages of preparations to suspend a project to build a nuclear power plant in the U.K., it was learned Friday.
The major heavy machinery-maker will confirm the move at a board meeting that could be held as early as next week, sources with knowledge of the matter said.
Hitachi is settling on the suspension as it is unclear whether the company will be able to receive additional assistance from the U.K. government, the sources said. It has had difficulty finding investors for a subsidiary that will operate the plant amid concerns over profitability.
The firm is expected to book up to about ¥300 billion in related losses in the business year through March, the sources said.
The focus of the project is the construction of a nuclear power plant on the island of Anglesey in north Wales, which had been scheduled to go into operation in the early 2020s.
Due to the growing likelihood that the project’s costs will far exceed the initial estimate, reaching ¥3 trillion, the company had proposed to London a review of the project including the level of financial assistance that would be available to the firm.
At a news conference on Thursday after a meeting with her Japanese counterpart, Shinzo Abe, U.K. Prime Minister Theresa May said that whether or not the project would go ahead was a commercial decision for Hitachi, leaving the future course of the project unclear.
The firm plans to suspend the project and reduce the related workforce, the sources said.
The company said in a statement that there has been no decision on the project, although it is closely examining a possible suspension and the potential financial impact from the perspective of economic rationality.
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