UK to sell Urenco share

12 October 2009

The British government is preparing to sell its one-third stake in Urenco as part of a plan to cut billions from national debt.


Centrifuges (Urenco)
Cascades of uranium enrichment
centrifuges. Urenco has enough of
these to meet 25% of the world
demand. (Image: Urenco)
Such a move has been under consideration for several years in line with an overall policy to end national ownership of nuclear businesses. The most recent pre-budget report stated that the government "continues to explore options for realizing value from its stake in Urenco" in terms of improving efficiency for state-owned assets.


The £16 billion ($25 billion) sale, to be conducted over the next two years, will include a major bridge on the outskirts of London, the Channel Tunnel high speed rail link, nationwide bookmakers The Tote and the Student Loans book. Prime minister Gordon Brown included Urenco in the group, "subject to security issues being addressed."


With a share of 25% of the uranium enrichment market, Urenco is very profitable. It had pre-tax profits of £654 million ($1.0 billion) in 2008 and an £18 billion ($28 billion) order book. It has also recently secured a €350 million ($517 million) debt facility with the European Investment Bank and it boasts strong credit ratings. Urenco's centrifuge uranium enrichment capacity stands at 11 million separative work units per year, with another 7 million coming in Europe and America by 2015.


Interest is sure to be very high, but selecting a new owner for the major stake could prove complex. The company is regulated by the Treaty of Almelo in 1971 to consdolidate and commercialise centrifuge enrichment research by Germany, the Netherlands and the UK. Those governments still control it through shareholding executives while the scope of the treaty has been expanded by the Treaty of Washington, which allowed for expansion in the USA, and the Treaty of Cardiff, which made possible a technology agreement with Areva of France.


The current holders of the remaining two-third of Urenco shares are an RWE/EOn holding company and the Dutch government, which has passed on 1.1% of its share to Philips, Shell and Stork.