The board of directors of US engineering and construction company McDermott International has approved the spin-off of its wholly-owned power and nuclear engineering subsidiary Babcock & Wilcox (B&W).
The planned spin-off, announced in December 2009, will be accomplished through a pro rata distribution of shares of B&W to holders of McDermott common stock. The distribution is expected to take place on 30 July 2010, with McDermott stockholders receiving one share of B&W common stock for every two share of McDermott common stock held at the close of business on 9 July.
Following the distribution of the B&W common stock in the spin-off - which does not require approval by the McDermott shareholders - B&W will be a separate, publicly traded company, and McDermott will not retain any ownership interest in B&W.
B&W designs, engineers, manufactures, and constructs power generation systems, primarily for large utility and industrial customers, as well as related aftermarket parts, services and environmental control systems. For its largest customer, the US government, The company supplies nuclear components for defence programs and manages and operates nuclear facilities and environmental management sites. B&W's nuclear plant products include: heat exchangers; pressure vessels; pressurizers; reactor vessels and closure heads; steam generators; and used fuel dry storage containers. It is also involved in the military sector. B&W has locations worldwide and employs over 13,000 people, not including approximately 10,000 joint venture employees.
In January 2009, a subsidiary of B&W completed its acquisition of Nuclear Fuel Services (NFS) - a provider of specialty nuclear fuels and related services - for an undisclosed sum. NFS is involved in the conversion of US government stockpiles of weapons-grade highly enriched uranium (HEU) into commercial nuclear reactor fuel. The company also operates a fuel production facility to support the USA's fleet of nuclear-powered submarines and aircraft carriers. NFS owns and operates a nuclear fuel fabrication facility licensed by the US Nuclear Regulatory Commission (NRC) in Erwin, Tennessee.
NFS now operates as a wholly-owned, indirect subsidiary of B&W, which at the time of the acquisition said that it will continue existing operations at NFS' Erwin facility, "as well as pursue new business opportunities that complement the plant's capabilities."
John Fees, CEO of McDermott, said: "We have made great progress over the past six months, and I am very pleased to now be reaching this important point in the process of completing the B&W spin-off."
He added, "We believe the spin-off will provide important benefits to our stockholders. We believe that as separate, independent, publicly traded entities, B&W and the remaining McDermott will benefit from enhanced management focus, more efficient capital allocation and greater operational and strategic flexibility. We also believe that the spin-off will help preserve B&W's ability to contract with the US government."
Following the spin-off of B&W, McDermott will be focused on the offshore upstream oil and gas market. The company provides front-end design and detailed engineering, construction and installation of offshore production facilities, pipelines and subsea systems. McDermott's customers include national and major oil and gas companies worldwide, and it has a significant presence in the Americas, Asia-Pacific, Caspian and Middle East markets. McDermott employs approximately 16,000 people worldwide.
Researched and written
by World Nuclear News