USEC Inc. (NYSE:USU) announced that it will soon begin soliciting
holders of USEC’s convertible notes as well as its two preferred
stockholders for votes on the Company’s Plan of Reorganization following
today’s hearing and order by Judge Christopher S. Sontchi in the United
States Bankruptcy Court for the District of Delaware.
USEC filed the Disclosure Statement describing the Plan of
Reorganization with the court on March 5, 2014, and updated it on June
19. No objections were raised prior to today’s hearing. The solicitation
package, including the Disclosure Statement and ballot, will be sent to
those entitled to vote as of the record date of July 3, 2014. The
deadline for voting is August 11.
The two classes of voting creditors will be asked to vote on the Plan of
Reorganization during a 30-day voting period that is expected to begin
July 12. USEC filed a pre-arranged case under Chapter 11 of the United
States Bankruptcy Code on March 5. The Plan of Reorganization is
supported by the holders of approximately 66 percent of the principal
amount of the $530 million of notes outstanding. The Plan of
Reorganization is also supported by the two holders of the Company’s
preferred equity who will also be entitled to vote on the Plan of
Reorganization. The holders of USEC’s common equity are assumed to have
rejected the Plan and, thus, the votes of such holders will not be
solicited during the upcoming period.
Following the voting period, the Plan of Reorganization is expected to
be reviewed by the court at a confirmation hearing scheduled for
September 5.
“We have made steady progress in recent months to restructure USEC and
we anticipate emerging from Chapter 11 protection with an improved
balance sheet,” said John K. Welch, USEC president and chief executive
officer.
“We are taking many steps in advance of emerging as a restructured
company. We are working closely with Oak Ridge National Laboratory to
continue the demonstration of the American Centrifuge technology. Our
Kentucky employees have done an outstanding job of preparing the Paducah
Gaseous Diffusion Plant for de-lease and return to the U.S. Department
of Energy in October. And we continue our record of delivering low
enriched uranium to our nuclear utility customers, on time and within
specifications,” Welch said.
USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel for commercial nuclear power plants.
Forward-Looking Statements:
This press 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” 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 the impact of and risks related to USEC
Inc.'s “pre-arranged” case under Chapter 11 of the bankruptcy code
including risks related to obtaining approval and confirmation of USEC
Inc.’s plan of reorganization, the impact of any delay or inability in
obtaining such confirmation, the impact of a potential de-listing of our
common stock on the NYSE, and the impact of our restructuring on the
holders of our common stock, preferred stock and convertible notes;
risks related to the ongoing transition of our business, including the
impact of our ceasing enrichment at the Paducah gaseous diffusion plant
and uncertainty regarding our ability to deploy the American Centrifuge
project; uncertainty regarding funding for the American Centrifuge
project and the potential for a demobilization or termination of the
American Centrifuge project if additional government funding is not
provided during the term of the agreement with UT-Battelle, LLC, the
management and operating contractor for the Oak Ridge National
Laboratory ("ORNL") for continued research, development and
demonstration of the American Centrifuge technology (the "ACTDO
Agreement"), including for any option periods, or upon completion of
such agreement; risks related to our ability to perform the work
required under the ACTDO Agreement at a cost that does not exceed the
firm fixed funding provided thereunder; the impact of actions we have
taken or may take (including as a result of the reduction in scope of
work under the ACTDO Agreement) to reduce spending on the American
Centrifuge project, including the potential loss of key suppliers and
employees, impacts to cost and schedule and the ability to remobilize
for commercial deployment of the American Centrifuge plant, impacts on
our liquidity as a result of demobilization or termination liabilities,
and potential impacts on our proposed plan of reorganization; risks
related to the underfunding of our defined benefit pension plans and
potential actions the Pension Benefit Guarantee Corporation could pursue
in connection with ceasing enrichment at the gaseous diffusion plants or
with any demobilization or termination of the American Centrifuge
project; the impact of uncertainty regarding our ability to continue as
a going concern on our liquidity and prospects; our ability to implement
the agreement with the U.S. Department of Energy (“DOE”) regarding the
transition of the Paducah gaseous diffusion plant and uncertainties
regarding the transition costs and other impacts of USEC ceasing
enrichment at the Paducah gaseous diffusion plant and returning the
plant to DOE; 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 (“LEU”); the impact of enrichment market conditions, increased
project costs and other factors on the economic viability of the
American Centrifuge project without additional government support and on
our ability to finance the project and the potential for a
demobilization or termination of the project; uncertainty regarding our
ability to achieve targeted performance over the life of the American
Centrifuge Plant which could affect the overall economics of the
American Centrifuge Plant; uncertainty concerning the ultimate success
of our efforts to obtain a loan guarantee from DOE and/or other
financing for the American Centrifuge project or additional government
support for the project and the timing and terms thereof; the dependency
of government funding or other government support for the American
Centrifuge project on Congressional appropriations or on actions by DOE
or Congress; potential changes in our anticipated ownership of or role
in the American Centrifuge project, including as a result of our role as
a subcontractor to ORNL or as a result of the need to raise additional
capital to finance the project in the future; the potential for DOE to
seek to terminate or exercise its remedies under the 2002 DOE-USEC
agreement; changes in U.S. government priorities and the availability of
government funding or support, including loan guarantees; risks related
to our ability to manage our liquidity without a credit facility; our
dependence on deliveries of LEU from Russia under a commercial supply
agreement (the “Russian Supply Agreement”) with a Russian government
entity known as Techsnabexport (“TENEX”) and limitations on our ability
to import the Russian LEU we buy under the Russian Supply Agreement into
the United States and other countries; risks related to actions that may
be taken by the U.S. Government, the Russian Government or other
governments that could affect our ability or the ability of TENEX to
perform the Russian Supply Agreement, including the imposition of
sanctions, restrictions or other requirements; risks related to our
ability to sell the LEU we procure under our fixed purchase obligations
under the Russian Supply Agreement; the decrease or elimination of
duties charged on imports of foreign-produced LEU; pricing trends and
demand in the uranium and enrichment markets and their impact on our
profitability; movement and timing of customer orders; changes to, or
termination of, our agreements with the U.S. government; risks related
to delays in payment for our contract services work performed for DOE,
including our ability to resolve certified claims for payment filed by
USEC under the Contracts Dispute Act; the impact of government
regulation by DOE and the U.S. Nuclear Regulatory Commission; the
outcome of legal proceedings and other contingencies (including lawsuits
and government investigations or audits); the competitive environment
for our products and services; changes in the nuclear energy industry;
the impact of volatile financial market conditions on our business,
liquidity, prospects, pension assets and credit and insurance
facilities; the timing of recognition of previously deferred revenue;
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 usec.com.
We do not undertake to update our forward-looking statements except as
required by law.
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