By Frank Lewis
May 2, 2014
By Frank Lewis
On Thursday, USEC, Inc. filed an 8K with the Securities and Exchange Commission that provides details of the signed contract with Oak Ridge National Laboratories (ORNL), and according to Paul Jacobson, Vice President of Communications for USEC, the bottom line for Piketon, Ohio is “the machines keep spinning in Piketon.”
Form 8-K is the “current report” companies must file with the SEC to announce major events that shareholders should know about. The instructions for Form 8-K describe the types of events that trigger a public company’s obligation to file a current report.
Jacobson said the American Centrifuge Technology Demonstration and Operations (ACTDO) Agreement builds on the success of previous centrifuge demonstration program, preserves a reliable and economic domestic uranium enrichment capability for national security, and promotes future private sector deployment.
The ACTDO Agreement is a firm, fixed price contract for $33.7 million that runs from May 1, 2014 to September 30, 2014. It is incrementally funded at a rate of $6.7 million per month for a total of $117 million. ORNL has two six-month options to extend the contract. Each option is priced at $41.7 million.
DOE instructed ORNL to assist in developing a path forward for achieving a reliable and economic domestic uranium enrichment capability that promotes private sector deployment and that supports national security purposes. Based on DOE’s instructions, ORNL chose to subcontract with USEC. The scope of work under the ACTDO Agreement continues operation and development of the American Centrifuge technology, The operation of the 120-machine demonstration cascade in Piketon will continue. Testing will continue at USEC’s test facility in Oak Ridge, Tennessee and work will continue in Oak Ridge at USEC’s centrifuge technology center on core American Centrifuge research and technology activities.
Jacobson said USEC will provide regular reports to ORNL. He said the cope of work under the ACTDO Agreement is reduced to approximately 60-percent of the previous Cooperative Agreement on a dollar basis per month. The reduction in scope pertains to certain engineering, procurement and construction activities and work related to the manufacturing of new centrifuge machines.
USEC is currently working with suppliers and evaluating actions that will be required as a result of the scope reduction. To better manage the transition, USEC has exercised its right to transfer at no cost the membership interests of Babcock & Wilcox Technical Services Group, Inc. in the Oak Ridge manufacturing operation to American Centrifuge Holdings, LLC, a wholly owned subsidiary of USEC. Jacobson said, as a result, American Centrifuge Manufacturing, LLC (ACM) is now 100-percent indirectly owned by USEC.
Frank Lewis can be reached at 740-353-3101, Ext. 252, or on Twitter @FrankLewispdt.