Kazatomprom to sell stake in enrichment JV

31 January 2020

Kazatomprom announced today it intends to sell its 50% interest (minus one share) in Uranium Enrichment Centre JSC (UEC) to its partner in the joint venture, TVEL, for RUB6.253 billion (about USD100 million). TVEL is the nuclear fuel manufacturer subsidiary of Russian state nuclear corporation Rosatom. The Kazakh uranium producer said the decision was based on its "value-driven strategy", as well as its review of current uranium enrichment market conditions.

TVEL said the transaction represented "a new configuration" in its cooperation with Kazatomprom (Image: UEC)

UEC is a joint Kazakhstan-Russian enterprise established in 2006 as part of the implementation of the Comprehensive Programme of Kazakhstan-Russia Cooperation in the Peaceful Use of Atomic Energy. It owns 25% (plus one share) of the Ural Electrochemical Integrated Plant JSC in Novouralsk, in the Sverdlovsk region of Russia. UEC was the first company with foreign-ownership to have an interest in a Russian uranium enrichment facility.

Kazatomprom said its interest in UEC was based on "an independent fair market valuation carried out by a major global advisory firm". It plans to retain one share in UEC, which will preserve its rights to access uranium enrichment services under the conditions previously agreed upon with TVEL. Following negotiations with TVEL and approval by Kazatomprom's board of directors, the transaction was approved by Russia's Federal Antimonopoly Service yesterday, and it is now subject to approval by TVEL's board of directors.

TVEL said the transaction represented "a new configuration" in cooperation between the two companies in uranium enrichment. "In particular, for TVEL, the corporate governance of UEC will be simplified through the consolidation of shares in the enterprise. In turn, Kazatomprom, retaining one share of the joint venture, will continue to be provided with guaranteed access to Russian uranium enrichment services (through deliveries by UEC)," TVEL said. "The parties have expressed confidence that implementation of the transaction will contribute to the strengthening of bilateral, mutually beneficial cooperation in the nuclear industry," it added.

If approved by TVEL’s board, and subject to customary closing conditions, the sale would be noted as a subsequent event in Kazatomprom’s 2019 Annual Operating and Financial Review and 2019 Annual Financial Statements (expected to be published 5 March 2020), with the financial impact expected to be reflected in the company’s 2020 first quarter financial statements.

Researched and written by World Nuclear News