LEXINGTON, MASS. — Raytheon Co. said it plans to take a first quarter charge to discontinued operations of between $275 million and $325 million.
Raytheon disclosed its plans in its form 8-K on April 9. The charge reflects the estimated cost required to complete two Massachusetts construction projects on which the company has guarantees.
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The projects, which were to be undertaken by the company that bought Raytheon’s former engineering and construction unit, have since become Raytheon’s responsibility. Raytheon sold the unit to construction company Washington Group International last July, retaining responsibility on some projects and agreeing to compensate the company for cost overruns on another.
Washington Group paid $53 million for the unit, taking on some $450 million in liabilities. Washington Group sued Raytheon last month, accusing the company of hiding the engineering and construction unit’s cost overruns at the time of purchase.
Last month, Washington Group abandoned work on the two projects. A subsequent ruling by the Supreme Court of New York gave responsibility for the projects back to Raytheon.
The projects are for the construction of two power generating facilities for Sithe Energies, a developer and operator of power plants in the U.S. and Canada. One facility is located at Mystic Station in Everett, Mass., and the other is located at Fore River Station in North Weymouth, Mass.
