By Frank Lewis
According to a story in Bidness ETC, USEC Inc. stock rose 1.44 percent in pre-market trading Tuesday on news that an amendment to its agreement with the US Department of Energy (DOE) will provide an additional $5.7 million for the American Centrifuge Project at Piketon. This means that total funding for the project has been increased to $27 million. Other terms and conditions of the agreement remain unchanged, Bidness ETC said.
USEC had previously entered an agreement with UT-Battelle LLC on May 1 to continue researching and developing American Centrifuge technology. Its agreement with the DOE will help further the DOE’s national security objectives.
The American Centrifuge Technology Demonstration and Operations Agreement (ACTDO), as it is called, will provide funds for ‘cascade operations’ and research. The agreement will disburse a total $75.3 million first in monthly installments of $6.7 million through Sept. 2014, and $6.9 million after that through March 2015.
USEC previously made an 8-K filing with the Securities and Exchange Commission regarding new funding of $2.5 million from the DOE. The funding was contingent to changes to the agreement for research on American Centrifuge technology.
Recently USEC has reported net losses over the last three years. During the first quarter of its 2014 fiscal year, it incurred a net loss of $5.08 million due to non-production costs at its Paducah facility. The costs totaled $34.9 million, and were classified as a ‘transition cost’ as the company prepares to return the facility to the DOE.
At the same time, the company’s revenue in the period was down 54 percent year-over-year to $148.6 million. The decline reflected fewer deliveries from its Separative Work Unit.
The Bidness ATC report goes on to say USEC stock has been under pressure, with its price down 17.8 percent year-to-date. In pre-market trading, its stock price had risen to $4.93 Tuesday. At 1:30 p.m. Tuesday, USEC, Inc. stock stood at $5.12, ranging on the day to that point from $4.92 to $5.96.
In July the two classes of voting creditors were asked to vote on the Plan of Reorganization during a 30-day voting period that began on 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, Toshiba and Babcock & Wilcox, who were also entitled to vote on the Plan of Reorganization
The Plan of Reorganization is expected to be reviewed by the court at a confirmation hearing scheduled for Sept. 5.
Frank Lewis can be reached at 740-353-3101, Ext. 1928, or on Twitter @FrankLewispdt.