USEC Seeking Alternatives Following Project Funding Delay
DOW JONES NEWSWIRES
USEC Inc. (USU) retained a financial adviser to explore "strategic
alternatives," as the big nuclear-fuel enrichment company prepares to address
Department of Energy concerns in a updated loan guarantee application.
Earlier this month, the supplier of enriched uranium fuel was denied funding
from the Energy Department to invest $30 million to support the demonstration of
technology at the company's American Centrifuge Plant.
USEC began demobilizing the plant in August, forcing an estimated 1,300 people
out of work, mostly at suppliers, after the agency rejected federal loan
guarantees for the project. The Energy Department has since said it may
reconsider the loan guarantees. The final review has been postponed until at
least early 2010.
On Monday, the company said it was "sharply focused on resolving the concerns
DOE has raised." But the company said it was considering a number of options.
The company is also working with suppliers to reduce incremental exposure for
additional payments. That total exposure by the end of the year is expected to
be between $65 million and $75 million.
Separately, the company reported it swung to a third-quarter loss on higher
costs and lower revenue and margins. USEC posted a loss of $6.2 million, or 6
cents a share, compared with a year-ago profit of $8.4 million, or 6 cents a
share.
Revenue for the quarter declined 7% to $549.3 million, as higher U.S.
government contract revenue was offset by declines in separative work units and
uranium. Gross margin tumbled to 39.2% from 48.4%.
USEC operates the only uranium-enrichment facility in the U.S. and supplies
more than half the U.S. market and a quarter of the world market. Its fuel is
used for commercial nuclear power plants.
Shares were down 2.1% to $3.75 in after-hours trading.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com
(END) Dow Jones Newswires
11-02-091823ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|