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Prospect of this Japanese company's UK nuclear plant closing is boosting shares

The original Wylfa Nuclear power station closed in 2015. Photo: Global Warming Images/Rex/Shutterstock

Shares in Japanese firm Hitachi rose after a report it would freeze a 3-trillion yen ($27.7bn) nuclear project in Britain.

The Nikkei Asian Review reported Hitachi’s board would most likely vote to suspend work on its Horizon Nuclear Power unit in northern Wales and post a special loss of $2bn (£1.6bn) for the year, following speculation that it has struggled to find investors.

But shares in the company went up 8% after the report, despite it saying “no formal decision” has been made about the future of the project. In December, Hitachi said it would do its utmost to keep the project alive, but on Friday it admitted suspension is still a possibility.

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“No formal decision has been made in this regard currently, while Hitachi has been assessing the Horizon Project including its potential suspension and related financial impacts in terms of economic rationality as a private company,” it said in a statement.

Hitachi announced that it would take over the Horizon project in 2012, and had been in formal negotiations with the UK government since June in the hope it would take a stake in the equity of the project, which would be financed by two-thirds equity and one-third debt.

According to the company, the value of the plant was 296bn yen at the end of September. The special loss is expected to be 200bn to 300bn yen if it does have to end the project, the Nikkei Asian Review reported.