Total will take over Toshiba’s US liquefied natural gas business and get $800 million cash from the Japanese group as part of the deal, the companies said on Saturday, weeks after attempts to sell it to a Chinese buyer fell through.

The French energy major is paying $15 million for the shares in the Texan assets, the firms said. Toshiba will also pay Total $815 million to take over all the contracts linked to the business, Total added.

The Japanese group had previously said that its US LNG operations may cause it losses of as much as 1 trillion yen ($9 billion).

Toshiba was locked into a contract to pay a fixed processing fee for LNG over 20 years from Freeport LNG — regardless of whether it could later find buyers for the fuel at prevailing rates.

For Total, the deal comes amid a big push to expand its LNG portfolio, and follows its proposed $8.8-billion deal in May to acquire Anadarko’s Africa assets, which include an LNG project in Mozambique.

“The takeover of Toshiba’s LNG portfolio is in line with Total’s strategy to become a major LNG portfolio player,” the French company said in a statement.

It added that the purchase would add 2.2 million tonnes per annum (Mtpa) of LNG to its US business, which would “enable optimizations of the supply and operations of these LNG sources.” Toshiba said it expected to complete the transaction by the March-end of the current financial year, following regulatory approval, and to book a 93 billion yen ($859 million) loss related to the deal.

China’s ENN Ecological Holdings Co last year agreed to buy the business, but scrapped the pact in April citing a failure to get approvals from shareholders and a US panel that monitors foreign investments.

At the time analysts said a recent plunge in spot LNG prices had made the deal unattractive.

The boss of struggling Toshiba said reently he would cut 7,000 jobs over the next five years as the Japanese engineering firm pulled out of foreign investments and downgraded its annual profit forecasts.

Toshiba also expects to scrap or consolidate some factories and reduce its subsidiaries by 25 per cent, announcing the withdrawal from a United States-based liquid natural gas business and the liquidation of NuGen, a nuclear subsidiary in Britain.

“After considering the additional costs entailed in continuing to operate NuGen, Toshiba recognises that the economically rational decision is to withdraw from the UK nuclear power plant construction project and has resolved to take steps to wind up NuGen,” the firm said in a statement.

A joint venture between Toshiba and France’s Engie, the NuGen project in Cumbria in northwest England was to comprise three reactors and was due to start producing energy from 2025.

Chief Executive Officer Nobuaki Kurumatani told reporters in Tokyo the decision was reached after “sincere discussions” with the British government.

He added that the firm expected to slash 7,000 jobs over the next five years, many coming from early or planned retirement.

The former Japanese behemoth is going through a sweeping reform effort to revive itself following its disastrous acquisition of US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection.

For the year to March 2019, the firm said it expected a net profit of 920 billion yen, down from an earlier projection of 1,070 billion yen.

Annual operating profit outlook is now 60 billion yen, down from a previous 70 billion yen forecast, while the sales estimates were kept at 3,600 billion yen.

Still, the firm’s share price soared, closing up more than 12 per cent on the Tokyo stock exchange, mainly due to the announcement of a share buy-back programme.

To stay afloat, the cash-strapped group sold its lucrative chip business for $21 billion to K.K. Pangea, a special-purpose company controlled by a consortium led by US investor Bain Capital.

The sales of the memory unit continued to boost Toshiba’s net profit, although the firm’s operations remained under pressure.

For the six months to September, the company’s net profit stood at 1.08 trillion yen, reversing a net loss of 49.8 billion yen seen a year earlier.

But its six-month operating profit fell to 6.98 billion yen, more than 80 per cent down from a year ago when the company took emergency cost-cutting steps such as the dramatic reduction of seasonal bonuses to its workers.

First-half sales came to 1.78 trillion yen, down 5.1 per cent from a year ago.

French energy company Total said on Friday that it expected Papua New Guinea’s incoming government to honour a contract signed by the previous administration for a liquefied natural gas project in the South Pacific archipelago.

Reuters