BETHESDA, Md.--(BUSINESS WIRE)--Apr. 6, 2016--
Centrus Energy Corp. (NYSE MKT: LEU) announced today that its Board of
Directors has adopted a Net Operating Loss (NOL) stockholder rights plan
to seek to preserve its substantial tax assets (NOLs) available to
reduce potential future tax liabilities and to protect the interests of
the Centrus stockholders. As of December 31, 2015, the Company had NOLs
of approximately $325 million that can be used in certain circumstances
to offset future U.S. taxable income.
The Company’s ability to utilize its NOLs during future periods could be
substantially limited if the Company undergoes an “ownership change” as
defined in Section 382 of the Internal Revenue Code. For this purpose,
an ownership change generally occurs if the Company's “five-percent
stockholders” have collectively increased their ownership in the
Company’s common stock by more than 50 percentage points over their
lowest percentage ownership at any time over a rolling three-year
period. The Company’s NOL rights plan is intended to reduce the
likelihood of an unintended ownership change occurring through the
purchase of the Company’s common stock.
In addition, in light of recently disclosed accumulations of the
Company’s shares in the market, this rights plan is intended to enable
all Centrus stockholders to realize the long-term value of their
investment and to reduce the potential that any person or group could
gain control of Centrus through open market accumulation without
appropriately compensating the Company’s stockholders for such control
or providing the Board sufficient time to make informed judgments. The
rights plan applies equally to all current and future stockholders and
is not intended to deter offers that are fair and otherwise in the best
interests of the Company's stockholders.
In connection with the adoption of the rights plan, the Board declared a
dividend of one preferred-share-purchase-right for each share of the
Company’s Class A common stock and Class B common stock outstanding as
of April 6, 2016. Effective today, if any person or group acquires 4.99%
or more of the outstanding shares of the Company’s common stock, or if a
person or group that already owns 4.99% or more of the Company’s Class A
common stock acquires additional shares representing 0.5% or more of the
outstanding shares of the Company’s Class A common stock (“acquiring
person or group”), then, subject to certain exceptions, there would be a
triggering event under the rights plan. The rights would then separate
from the Company’s Class A common stock and Class B common stock and
would be adjusted to become exercisable, at an initial exercise price of
$26.00, to purchase the number of 1/1000ths of a share of a new series
of the Company’s preferred stock equivalent to the number of shares of
Class A common stock or Class B common stock, depending on the holder
thereof, of the Company having, at the time of the applicable triggering
transaction, a market value equal to twice the exercise price. The
rights beneficially owned by an acquiring person or group would become
null and void, resulting in significant dilution in the ownership
interest of such acquiring person or group.
The Board, or an independent committee of the Board, has the discretion
to exempt any acquisition of the Company’s common stock from the
provisions of the rights plan if it determines that doing so would not
jeopardize or endanger the Company's use of its tax assets or is
otherwise in the best interests of the Company. The Board also has the
ability to amend or terminate the rights plan prior to a triggering
event.
The Company expects to seek stockholder approval of the Rights Plan in
connection with the 2017 annual meeting. The rights issued under the
rights plan will expire if not approved by the Company's stockholders
prior to that date or on April 6, 2019, if the Rights Plan is so
approved. The rights may also expire on an earlier date if certain
events occur, as described more fully in the Section 382 Rights
Agreement that the Company will file with the Securities and Exchange
Commission (SEC).
The adoption of the rights plan will not be a taxable event, will not
affect the reported financial condition or results of operations of the
Company and will not change the manner in which the Company’s common
stock is traded.
O’Melveny & Myers LLP is acting as Centrus’ legal counsel.
Additional information regarding the rights plan will be contained in a
Form 8-K and in a Registration Statement on Form 8-A that Centrus is
filing with the SEC.
About Centrus Energy Corp.
Centrus Energy Corp. is a trusted supplier of enriched uranium fuel for
commercial nuclear power plants in the United States and around the
world. Our mission is to provide reliable and competitive fuel goods and
services to meet the needs of our customers, consistent with the highest
levels of integrity, safety, and security.
Forward-Looking Statements:
This news release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934 - that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as “expects”, “anticipates”,
“intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or
“may” and other words of similar meaning. Forward-looking statements by
their nature address matters that are, to different degrees, uncertain.
These forward-looking statements include, without limitation, the use of
NOLs to offset future taxable income and the use of the rights plan to
prevent an “ownership change” as defined in Section 382 of the Internal
Revenue Code. For Centrus, particular risks and uncertainties that could
cause our actual future results to differ materially from those
expressed in our forward-looking statements include, but are not limited
to: the difficulty of determining all of the facts relative to Sections
382 and 383 of the Internal Revenue Code, unreported buying and selling
activity by stockholders and unanticipated interpretations of the
Internal Revenue Code and regulations, our ability to generate taxable
income to utilize all or a portion of the NOLs prior to the expiration
thereof, the possibility that the rights plan may not successfully deter
stockholders from triggering an ownership change through the purchase of
Class A Common Stock of Centrus, risks associated with the
enforceability of the rights plan under Delaware law or other applicable
law, risks that the rights plan may discourage third party offers to
acquire Centrus, or any interests therein, risks that the rights plan
may have an adverse effect on the value of Centrus’ Class A Common Stock
or Class B Common Stock, risks and uncertainties related to the adoption
of fresh start accounting; risks related to our significant long-term
liabilities, including material unfunded defined benefit pension plan
obligations and postretirement health and life benefit obligations;
risks related to the limited trading markets in our securities and risks
relating to our ability to maintain the listing of our common stock on
the NYSE MKT LLC; the continued impact of the March 2011 earthquake and
tsunami in Japan on the nuclear industry and on our business, results of
operations and prospects; the impact and potential extended duration of
the current supply/demand imbalance in the market for low-enriched
uranium; uncertainty regarding our ability to commercially deploy
competitive gas centrifuge enrichment technology; risks relating to our
dependence on intercompany support from Enrichment Corp; risks relating
to our sales order book, including uncertainty concerning customer
actions under current contracts and in future contracting due to market
conditions and lack of production capability; risks associated with our
reliance on third-party suppliers to provide essential services to us;
pricing trends and demand in the uranium and enrichment markets and
their impact on our profitability; movement and timing of customer
orders; changes in U.S. government priorities and the availability of
government funding, including loan guarantees and ongoing funding for
Oak Ridge National Laboratory; the impact of government regulation by
the U.S. Department of Energy and the U.S. Nuclear Regulatory
Commission; uncertainty regarding the potential for the U.S. Department
of Energy (“DOE”) to seek to terminate or exercise its remedies under
the June 2002 DOE-USEC Agreement; the outcome of legal proceedings and
other contingencies (including lawsuits and government investigations or
audits); the competitive environment for our products and services; the
potential for further demobilization or termination of the American
Centrifuge project; changes in the nuclear energy industry; the impact
of financial market conditions on our business, liquidity, prospects,
pension assets and insurance facilities; revenue and operating results
can fluctuate significantly from quarter to quarter, and in some cases,
year to year; and other risks and uncertainties discussed in our filings
with the Securities and Exchange Commission, including our Annual Report
on Form 10-K and quarterly reports on Form 10-Q, which are available on
our website at www.centrusenergy.com.
We do not undertake to update our forward-looking statements except as
required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160406006552/en/
Source: Centrus Energy Corp.
Centrus Energy Corp.
Investors:
Don Hatcher, 301-564-3460
or
Media:
Jeremy
Derryberry, 301-564-3392
