The Shaw Group Inc. (NYSE: SGR) announced today that its
wholly-owned subsidiary, Nuclear Energy Holdings, L.L.C. (NEH), has
priced its private offering of yen-denominated JPY 128.98 billion face
amount of limited-recourse bonds being marketed to investors in Japan
and elsewhere outside the United States, to be used to finance its
previously announced acquisition of 20% of the Westinghouse
Acquisition Companies. The bonds are to be issued in two tranches, a
floating-rate tranche and a fixed-rate tranche; and will mature March
15, 2013. The JPY 78.00 billion (equivalent to approximately $653
million) floating-rate tranche is to be issued with a floating coupon
rate of 0.70% above the six-month Yen LIBOR rate. NEH has entered into
a separate hedging transaction which fixes the interest cost on the
floating-rate bonds. The JPY 50.98 billion (equivalent to
approximately $427 million) fixed-rate tranche is to be issued with a
coupon rate of 2.20%. The bond transaction is expected to close on
Friday, October 13, 2006, subject to customary closing conditions.
As previously disclosed in Shaw's October 4, 2006 press release,
the limited-recourse bonds will be secured by the assets of and 100%
of the membership interests in NEH, its shares in the Westinghouse
Acquisition Companies, along with the corresponding Toshiba option, a
$36 million letter of credit established by Shaw for the benefit of
NEH (the "Principal LC") and a letter of credit to secure the payment
of bond interest (the "Interest LC"). The initial Interest LC
(previously estimated to be approximately $91 million) will be
established at approximately $113 million, which now includes an
approximately $14 million withholding tax reserve.
NEH will use the proceeds from the bond offering plus
approximately $30 million of cash for the purchase of the 20% interest
in the Westinghouse Acquisition Companies. Because of market
conditions, the effective interest rate on the bonds is slightly
higher than previously estimated. As previously stated, Shaw expects
the Westinghouse Acquisition Companies transaction to occur in
October, 2006, subject to customary closing conditions. Shaw estimates
its fees and expenses for the acquisition transaction, including the
bond offering, to approximate $20 million. In the event the
acquisition were not to occur, NEH would repay the proceeds to the
bondholders and cancel the related transactions, and would incur
certain additional expenses.
This announcement is neither an offer to sell nor a solicitation
of an offer to buy any of these securities. The securities to be
offered will not be registered under the Securities Act or applicable
state securities laws and may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act.
The Shaw Group Inc. is a leading global provider of engineering,
procurement, construction, technology, maintenance, fabrication,
manufacturing, consulting, remediation, and facilities management
services for government and private sector clients in the energy,
chemical, environmental, infrastructure and emergency response
markets. Headquartered in Baton Rouge, Louisiana, with over $4 billion
in annual revenues, Shaw employs approximately 22,000 people at its
offices and operations in North America, South America, Europe, the
Middle East and the Asia-Pacific region. For further information,
please visit Shaw's website at www.shawgrp.com.
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. The statements
contained herein that are not historical facts (including without
limitation statements to the effect that the Company or its management
"believes," "expects," "anticipates," "plans," or other similar
expressions) and statements related to revenues, earnings, backlog, or
other financial information or results are forward-looking statements
based on the Company's current expectations and beliefs concerning
future developments and their potential effects on the Company. There
can be no assurance that future developments affecting the Company
will be those anticipated by the Company. These forward-looking
statements involve significant risks and uncertainties (some of which
are beyond our control) and assumptions and are subject to change
based upon various factors. Should one or more of such risks or
uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those
projected in the forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. A description of some of the risks and uncertainties that
could cause actual results to differ materially from such
forward-looking statements can be found in the Company's reports and
registration statements filed with the Securities and Exchange
Commission, including its Form 10-K and Form 10-Q reports, and on the
Company's web-site under the heading "Forward-Looking Statements".
These documents are also available from the Securities and Exchange
Commission or from the Investor Relations department of Shaw. For more
information on the company and announcements it makes from time to
time on a regional basis visit our web site at www.shawgrp.com.
