The Shaw Group Inc. plans to sell its piece of Westinghouse Group to majority owner Toshiba Corp. in a move that will reduce the Baton Rouge company’s debt by close to $1.7 billion and allow it to continue working with Westinghouse.

Shaw owns 20 percent of Westinghouse through subsidiary Nuclear Energy Holdings LLC as the result of a deal in 2006 in which Toshiba bought 77 percent of Westinghouse for $4.16 billion and Ishikawajima-Harima Heavy Industries bought 3 percent for $162 million.

Shaw acquired its piece of Westinghouse and a major role in the nuclear power industry in 2006 by issuing close to $1.1 billion in yen-backed bonds. Since then, the yen-denominated debt has swollen by about $600 million to almost $1.7 billion, Shaw said Tuesday.

“The continued appreciation of the yen against the dollar has been relentless five quarters in a row,” said Brian K. Ferraioli, executive vice president and chief financial officer, of the sale during a conference call with analysts Tuesday. “It’s something we’ve been considering for quite some time,” he said.

Ferraioli also said the complicated yen-denominated financing arrangement confuses potential investors in the company’s stock.

“It is difficult for many investors to get their heads around when they’re looking at Shaw for the first time,” he said.

Shaw’s stock shot up nearly 8 percent Tuesday after its Westinghouse announcement, rising $1.70 to $23.53. The stock has traded in the $20.24-$41.62 range over the past 52 weeks.

The Westinghouse sell-off will leave Shaw “virtually debt-free,” said J.M. Bernhard Jr., president and CEO of Shaw.

The company, with engineering, fabrication and construction projects in industrial sectors around the world. Shaw has about $7 billion in annual revenue and some 27,000 employees internationally.

That includes a nuclear components manufacturing plant that Shaw put in Lake Charles after its investment in Westinghouse.

Shaw’s stake in Westinghouse had cemented an exclusive role to perform engineering, procurement and construction work on Westinghouse nuclear projects. At the time of the acquisition, Westinghouse controlled about half of the world’s nuclear reactor business. Shaw also gained an edge as the exclusive supplier of piping for the projects.

Officials said Tuesday that Shaw and Westinghouse are under contract to provide engineering, procurement and construction services for six new AP1000 nuclear power units in the United States. That includes two reactors each in Georgia, South Carolina and Florida. These projects represent the first contracts awarded in nearly 30 years for new nuclear power plants in the country.

Shaw is also building four units in China. In addition, Shaw has a contract for technical support services on an additional two-unit AP1000 project in China.

“There’s going to be no impact on the projects that we currently have, and we fully intend to continue working with Westinghouse on new AP1000 projects in the United States and internationally,” Bernhard said Tuesday.

“We firmly believe that the sale of our investment in Westinghouse is in the best interest of our shareholders and our future business opportunities,” he added. “Once the sale is final, Shaw will be essentially debt-free with an extremely strong balance sheet.”

Shaw also expects to continue to work with Westinghouse on new AP1000 projects and with Toshiba on Advanced Boiling Water Reactor projects. The companies already have begun pre-proposal and study activities in anticipation of those projects, Shaw officials said.

Shaw officials offered no specifics when asked about other possible investments the company might consider in the future.

“All the options are on the table relating to how we re-deploy the cash …. And I would not rule out re-leveraging the company for an appropriate transaction, although there is nothing imminent at this time,” Ferraioli said.

However, when it comes to exploring investment options, Shaw will continue to focus on the energy markets, Bernhard said. “It’s hunting time for Shaw,” he remarked.

Shaw had included in its deal to buy its piece of Westinghouse an option to sell its stake to Toshiba between March 2010 and March 2013.

Shaw said its Nuclear Energy Holdings subsidiary will try to gain approval to redeem bonds early that were used in financing its Westinghouse acquisition. At Aug. 31 currency exchange rates, Shaw would have a pre-tax gain of $545 million, the company said.

Otherwise, the pay-off will occur in 2013 and a gain or loss would be determined at that time.