USEC plans for bankruptcy

17 December 2013

UPDATED: Information on extended DoE funding was added to this story on 19 December.

US uranium enrichment company USEC is to file for voluntary bankruptcy during the first quarter of 2014 as part of a financial restructuring plan. The filing is not expected to affect ongoing operations or the American Centrifuge research, development and demonstration program.

RD&D centrifuge installation (USEC)_460
Centrifuges being installed at ACP's commercial demonstration cascade, which started operation in October 2013 (Image: USEC)

The restructuring plans would see USEC's existing $530 million debt replaced with a new debt issue of $200 million and the replacement of existing equity with new equity. It would see existing strategic investors B&W and Toshiba jointly holding 16% of the new common stock and $40 million of the debt, although detailed terms are still being negotiated. According to an announcement by USEC, the new capital structure would give it greater financial flexibility to support the American Centrifuge project.

The prearranged and voluntary bankruptcy petition will be needed in order to implement the terms of the agreement. It is expected to apply only to parent company USEC Inc, and not its subsidiaries.

The American Centrifuge Plant (ACP) under construction at Piketon, Ohio, since 2007 aims to commercialise centrifuge enrichment technology developed by USEC from earlier US Department of Energy (DoE) work. Although a 120-centrifuge commercial demonstration cascade was completed and put into operation earlier this year, the project has almost ground to a halt thanks to problems securing the necessary federal loan guarantees. Since the closure of the Paducah gaseous diffusion enrichment plant earlier this year, the ACP is the focus of USEC's enrichment activities. In the meantime, a major centrifuge enrichment plant using European centrifuge technology, Urenco USA, has been operational in New Mexico since 2010.

Two days after USEC announced its restructuring and bankruptcy plans, the DoE said it would extend the ACP research, development and demonstration (RD&D) program by three months beyond 15 January 2014, subject to Congressional appropriations. USEC and DoE will share the $10 million per month costs of the program on a 80% to 20% basis. The RD&D program itself continues to perform within budget and on schedule, USEC said.

Researched and written
by World Nuclear News