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Hitachi mulls $2.8 billion loss on halt in UK nuclear project

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Hitachi nuclear
Asia   The freezing of Hitachi's 3 trillion yen plan

Hitachi is considering booking a special loss of up to 300 billion yen ($2.8 billion) in the year ending in March, as it plans to suspend a nuclear project in Britain due to swelling costs, sources close to the matter said, Kyodo reported.

The freezing of the Japanese conglomerate's 3 trillion yen plan to build two reactors on the Isle of Anglesey in Wales would mean that all of the overseas nuclear projects promoted by the Japanese government as part of the country's growth strategy have suffered setbacks.

Its British unit Horizon Nuclear Power Ltd. has yet to halt its preparations for starting construction and Hitachi could make a final decision on the matter at a board meeting to be held as early as Thursday, the sources said.

The initial plan was to have the British government and financial institutions finance 2 trillion yen, and then have the government and each of the British and Japanese private sectors invest 300 billion yen.

But Hitachi has faced difficulties finding investors to finance the construction as its cost has ballooned to 3 trillion yen from the initially estimated 2 trillion yen. Japanese firms including Tokyo Electric Power Company Holdings Inc. and Chubu Electric Power Co. have showed reluctance in investing in the project.

The company, which is expecting to post a group net profit of 400 billion yen in the current fiscal year through March, estimated in July that the loss of withdrawing from the nuclear project would total 270 billion yen.

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