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Raytheon Will Take Charge to Cover Costs of Plants

WEYMOUTH, MA-Raytheon Co. takes a $275 to $325 million charge in its first quarter to cover the completion of two power plants here and in Everett. The company is obligated to finish building the plants.

By Naomi Grossman | Updated on April 10, 2001

WEYMOUTH, MA-Raytheon Co. will take a charge of $275 to $325 million in the first quarter to cover the cost of completing two power plants, here and in Everett, that the company guaranteed to Sithe Energies Inc., the developer of the power plants. Raytheon’s Engineers and Constructor’s unit was purchased last year by Washington Group International, which was supposed to complete the job of building the plants.

The Idaho-based company ran into trouble, defaulted on its loans and stopped working on the plants. Because of its original contract with Raytheon, the New York-based Sithe stated that Raytheon is obligated to finance the completion of the plants and filed suit in New York State against Raytheon. Raytheon agreed to complete the work, but because it got out of construction by selling off that unit, it hired Duke/Flour Daniel to do the job.

Reportedly, Raytheon made similar guarantees on 12 other projects that are now being overseen by WGI. If WGI goes bankrupt, it is unclear what kind of charge Raytheon would face.

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