Shaw Group says CB&I deal moving forward

Shaw Group (NYSE: SHAW) said Oct. 19 that the company’s planned combination with CB&I (NYSE: CBI) is still on schedule for closing in the first quarter of calendar year 2013.

This past summer Shaw announced it entered into a definitive agreement to be acquired by CB&I, also known as Chicago Bridge & Iron, in a cash and stock transaction valued at roughly $3.2bn based on trading price of CB&I common stock as of Oct. 15.

CB&I is an international infrastructure engineering and construction business. It will hold its quarterly earnings call Oct. 23.

Shaw announced its financial results for its 2012 fiscal year and the quarter ended Aug. 31.

Shaw is the Louisiana-based engineering, procurement and construction (EPC) vendor that builds various types of power plants and also developments emission control retrofit projects for existing coal plants.

Shaw is helping a group led by a Southern (NYSE: SO) subsidiary build two new nuclear units at the Vogtle complex in Georgia. It is also playing a key role in development of SCANA’s (NYSE: SCG) new V.C. summer nuclear units in South Carolina.

Shaw reported earnings for the fourth quarter of $1.68 per share including the Westinghouse segment and $1.86 per share excluding the Westinghouse segment.

Shaw’s total adjusted cash balance at the end of the fourth quarter was approximately $1.4bn, which includes a cash collection of $107m from the previously announced GenOn (NYSE: GEN) Mid-Atlantic settlement and the cash proceeds from the Energy & Chemicals divestiture.

“All of Shaw’s business segments continue to perform well,” said Shaw Group Chairman, President and CEO J.M. Bernhard Jr. “We are making progress with the CB&I transaction, with all aspects moving forward as scheduled toward closing in the first quarter of calendar year 2013.”

For fiscal year 2012, Shaw’s Westinghouse segment includes a non-cash, non-operating foreign exchange translation gain of $40.8 million pre-tax, or $25m after tax. The prior year included a non-cash foreign exchange translation loss of $159m pre-tax, or $97.8m after tax.

Shaw’s subsidiary Nuclear Energy Holdings (NEH) has a 20% equity interest in companies collectively known as the Westinghouse Group. NEH financed this investment partially through issuing limited recourse Japanese yen-denominated bonds and, to mitigate the risk associated with foreign currency fluctuation, simultaneously entered into a yen-denominated put option agreement with Toshiba, which provides NEH the option to sell all or part of its equity interest to Toshiba and receive a pre-determined yen-denominated price for the shares.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.