BETHESDA, Md., Jun 30, 2011 (BUSINESS WIRE) --
USEC Inc. (NYSE: USU) announced today that it has entered into a standstill agreement with its strategic investors Toshiba Corporation (Toshiba), acting through its U.S. subsidiary Toshiba America Nuclear Energy Corporation, and Babcock & Wilcox Investment Company (B&W) to provide a limited additional period of time to obtain a conditional commitment from the U.S. Department of Energy (DOE) for a $2 billion loan guarantee to build the American Centrifuge uranium enrichment plant in Piketon, Ohio. During this limited period, USEC expects to work with DOE to complete the loan guarantee review process and obtain a decision from DOE on the conditional commitment by the end of July 2011.
"USEC has been working diligently with DOE over the past several months to conclude the review process for our loan guarantee application, and we appreciate the attention they are giving to the matter. We are working hard toward a successful conclusion, but we have not been able to conclude the conditional commitment process before June 30, which was the outside date for the next stage of the Toshiba and B&W investment. This standstill agreement provides the limited additional time needed for DOE to complete its review and reach a decision during July," said John K. Welch, USEC president and chief executive officer.
Under the Securities Purchase Agreement dated May 25, 2010, Toshiba, B&W and USEC each had the right to terminate its obligations under the agreement if the $50 million second phase of the strategic investment by Toshiba and B&W did not close by June 30, 2011. Obtaining a conditional commitment for the DOE loan guarantee is the key remaining condition to closing of the second phase of the Toshiba and B&W investment. Under the Standstill Agreement, each of USEC, Toshiba and B&W agreed not to exercise its right to terminate the Securities Purchase Agreement prior to August 15, 2011. This standstill provides a limited additional period of time to finalize and enter into the DOE conditional commitment and then close the second phase of the strategic investment.
Background
USEC applied for a $2 billion loan guarantee from DOE in 2008 to build the American Centrifuge Plant (ACP) in Piketon, Ohio that will support approximately 8,000 U.S. jobs during construction. When complete, the ACP will provide low enriched uranium to fuel nuclear power reactors in the United States and internationally.
The American Centrifuge Plant will use USEC's AC100 centrifuge machine, which has been developed and engineered and will be manufactured in the United States. The AC100 design is a disciplined evolution of classified U.S. centrifuge technology originally developed by DOE and successfully demonstrated during the 1980s. USEC has invested approximately $2 billion in the American Centrifuge Project to date.
Learn more about the American Centrifuge Project at www.americancentrifuge.com.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.
Forward-Looking Statements
This news release contains "forward-looking statements" -- 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" and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For USEC, 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: risks related to the deployment of the American Centrifuge technology, including risks related to performance, cost, schedule and financing; our success in obtaining a loan guarantee from the DOE for the American Centrifuge Plant, including our ability to address the technical and financial concerns raised by DOE and the timing of any loan guarantee; our ability to reach agreement with DOE on acceptable terms of a conditional commitment, including the timing of any decision and the determination of credit subsidy cost, and our ability to meet all required conditions to funding; our ability to obtain additional financing beyond the $2 billion of DOE loan guarantee funding for which we have applied, including our success in obtaining Japanese export credit agency financing of $1 billion; the impact of the demobilization of the American Centrifuge project and uncertainty regarding our ability to remobilize the project and the potential for termination of the project; our ability to meet the November 2011 financing milestone and other milestones under the June 2002 DOE-USEC Agreement; restrictions in our credit facility that may impact our operating and financial flexibility and spending on the American Centrifuge project; risks related to the completion of the remaining two phases of the three-phased strategic investment by Toshiba and B&W, including our ability to satisfy the significant closing conditions in the securities purchase agreement governing the transactions and the right of Toshiba and B&W to terminate the securities purchase agreement after the expiration of the standstill agreement if the second closing has not yet occurred; the impact of a failure to consummate the transactions on our business and prospects; changes in U.S. government priorities and the availability of government funding, including loan guarantees; the competitive environment for our products and services; changes in the nuclear energy industry; the impact of the recent natural disaster in Japan on the nuclear industry including its effect on Japan's nuclear energy policy and on our business, results of operations and prospects; 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.usec.com. We do not undertake to update our forward-looking statements except as required by law.
SOURCE: USEC Inc.
USEC Inc.
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