USEC (NYSE: USU) now has until Sept. 30 to receive a $2 billion loan guarantee from the U.S. Department of Energy (DOE) for the $2.8 billion American Centrifuge nuclear project. The deadline is part of an amended standstill agreement between USEC and partners Toshiba and Babcock & Wilcox (NYSE: BWC).
In order for USEC to get the loan guarantee, the company said in a statement that they “must improve financial and project execution depth to achieve a manageable credit subsidy cost estimate and to proceed with the DOE loan guarantee.” The DOE and USEC are currently working under a cost-sharing research development and demonstration plan worth $90 million, and USEC said in a release it is in talks with Japanese export credit agencies for $1 billion of the project costs.
Toshiba and B&W invested $75 million in USEC in May 2012 with the agreement they would invest another $50 million once the DOE approved the project for a loan guarantee before the end of June 2011. When that deadline was not met, the investors made a standstill agreement, which changed the deadline to August 15. Now the deadline has been moved to Sept. 30.
The AC1000 is a tall carbon fiber centrifuge unit based on designs developed at the Oak Ridge National Laboratory and demonstrated by the DOE in the 1980s. Main buildings for the plant have been constructed at USEC's site in Piketon, Ohio. It should eventually house around 11,500 centrifuges, which together would have a capacity of 3.8 million separative work units per year. A lead cascade began operation at Piketon in September 2007.
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