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Raytheon Hires Fluor Unit to Finish Plants

April 10, 2001|From Times News Services

Raytheon Co. has hired Duke/Fluor Daniel, one of the largest power-plant builders, to complete work on two Boston-area power plants that are at the center of a lawsuit filed last month.

Raytheon, based in Lexington, Mass., said it will take a charge of $325 million in the first quarter to reflect the estimated cost of completing the work.

The construction company is a joint venture between Fluor Corp. in Aliso Viejo and Duke Energy Corp. in Charlotte, N.C.

The charge stems from Raytheon's sale of its engineering and construction business last year to Washington Group International Inc. in Boise, Idaho. As part of the deal, Raytheon agreed to performance guarantees for the construction of two power plants in Massachusetts.

Raytheon said it hired Duke/Fluor Daniel to complete the two power plants after Washington Group walked off the job last month and sued to rescind its purchase of the Raytheon business. It also accused the missile maker of deliberately withholding financial information about various projects.

Raytheon denied the charges. It said Monday that an Idaho state court sent the case to arbitration.

Washington Group, which paid $53 million for the engineering division and assumed $450 million in liabilities, is in talks with lenders aimed at avoiding the filing of a Chapter 11 bankruptcy protection.

Raytheon said it expects the charge to affect consolidated operating cash flow over the next four to six quarters.

Raytheon's Class B shares rose 22 cents to $31.19; Washington Group shares were up 6 cents at $1.76, both on the New York Stock Exchange.

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Reuters and Bloomberg News were used in compiling this report.

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